Folgerty Enterprises prepared the following sales budget: Month Budgeted Sales March $6,000 April $13,000 May $12,000 June $14,000 The expected gross profit rate is 30% and the inventory at the end of February was $10,000. Desired finished goods inventory levels at the end of the month are 20% of the next month's cost of goods sold. What is the desired beginning finished goods inventory on June 1 (in dollars)? Select one: a. $1,960 b. $840 c. $1,680 d. $9,800 e. $1,860
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.
Folgerty Enterprises prepared the following sales budget:
|
Month |
Budgeted Sales |
|
March |
$6,000 |
|
April |
$13,000 |
|
May |
$12,000 |
|
June |
$14,000 |
The expected gross profit rate is 30% and the inventory at the end of February was $10,000. Desired finished goods inventory levels at the end of the month are 20% of the next month's cost of goods sold.
What is the desired beginning finished goods inventory on June 1 (in dollars)?
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