Carla Vistas, Inc. provided the following budgeted information for March through July: March April May June July Projected sales $100400 $118080 $110400 $126720 $135760 Projected merchandise purchases $78720 $88720 $72320 $63920 $70080 Inventory at end of month $11520 $13040 $10880 $11920 $13760 Carla Vistas estimates that it will collect 30% of its sales in the month of sale and 70% in the month after the sale. General operating expenses are budgeted to be $29760 per month of which depreciation is $29760 of this amount. Carla Vista pays operating expenses in the month incurred. The income tax rate is 30%. How much is budgeted net income for May? a. $8080. b. $6160. c. $4312. d. $5858.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Carla Vistas, Inc. provided the following budgeted information for March through July:
|
March
|
April
|
May
|
June
|
July
|
|
|---|---|---|---|---|---|
|
Projected sales
|
$100400 | $118080 | $110400 | $126720 | $135760 |
|
Projected merchandise purchases
|
$78720 | $88720 | $72320 | $63920 | $70080 |
|
Inventory at end of month
|
$11520 | $13040 | $10880 | $11920 | $13760 |
Carla Vistas estimates that it will collect 30% of its sales in the month of sale and 70% in the month after the sale. General operating expenses are budgeted to be $29760 per month of which
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