Executive officers of Munoz Company are wrestling with their budget for the next year. The following are two different sales estimates provided by two different sources. Source of Estimate Sales manager Marketing consultant Required A Required B First Quarter $ 388,000 517,000 Munoz's past experience indicates that cost of goods sold is about 60 percent of sales revenue. The company tries to maintain 20 percent of the next quarter's expected cost of goods sold as the current quarter's ending Inventory. This year's ending Inventory is $35,000. Next year's ending Inventory is budgeted to be $36,000. Required a. Prepare an Inventory purchases budget using the sales manager's estimate. b. Prepare an Inventory purchases budget using the marketing consultant's estimate. Complete this question by entering your answers in the tabs below. Sales Second Quarter $ 319,000 457,000 Prepare an inventory purchases budget using the sales manager's estimate. Note: Round your final answers to nearest whole dollar amount. Total inventory needed Required purchases First Quarter Second Quarter 388,000 $ $ < Required A Third Quarter $ 287,000 418,000 319,000 $ Fourth Quarter $ 479,000 658,000 Third Quarter Fourth Quarter 287,000 $ 479,000 Required B >
Executive officers of Munoz Company are wrestling with their budget for the next year. The following are two different sales estimates provided by two different sources. Source of Estimate Sales manager Marketing consultant Required A Required B First Quarter $ 388,000 517,000 Munoz's past experience indicates that cost of goods sold is about 60 percent of sales revenue. The company tries to maintain 20 percent of the next quarter's expected cost of goods sold as the current quarter's ending Inventory. This year's ending Inventory is $35,000. Next year's ending Inventory is budgeted to be $36,000. Required a. Prepare an Inventory purchases budget using the sales manager's estimate. b. Prepare an Inventory purchases budget using the marketing consultant's estimate. Complete this question by entering your answers in the tabs below. Sales Second Quarter $ 319,000 457,000 Prepare an inventory purchases budget using the sales manager's estimate. Note: Round your final answers to nearest whole dollar amount. Total inventory needed Required purchases First Quarter Second Quarter 388,000 $ $ < Required A Third Quarter $ 287,000 418,000 319,000 $ Fourth Quarter $ 479,000 658,000 Third Quarter Fourth Quarter 287,000 $ 479,000 Required B >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
Transcribed Image Text:Executive officers of Munoz Company are wrestling with their budget for the next year. The following are two different sales estimates
provided by two different sources.
Source of Estimate
Sales manager
Marketing consultant
First Quarter
$ 388,000
517,000
Complete this question by entering your answers in the tabs below.
Sales
Munoz's past experience indicates that cost of goods sold is about 60 percent of sales revenue. The company tries to maintain 20
percent of the next quarter's expected cost of goods sold as the current quarter's ending Inventory. This year's ending Inventory is
$35,000. Next year's ending Inventory is budgeted to be $36,000.
Required
a. Prepare an Inventory purchases budget using the sales manager's estimate.
b. Prepare an Inventory purchases budget using the marketing consultant's estimate.
Required A Required B
Prepare an inventory purchases budget using the sales manager's estimate.
Note: Round your final answers to nearest whole dollar amount.
Total inventory needed
Second Quarter
$319,000
457,000
Required purchases
First Quarter Second Quarter
388,000 $
$
< Required A
Third Quarter
$287,000
418,000
319,000 $
Fourth Quarter
$ 479,000
658,000
Third Quarter Fourth Quarter
287,000 $ 479,000
Required B >
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