For the first quarter of 2021, the target sales amount to 500,000 units. For the months of January, February and March, these sales be spread at 25%, 30% and 45% respectively. The cost per unit would be P200. It is the policy of the firm to maintain 20% of the next month’s sales as ending inventory of the current month. The beginning balance of the year for inventories and accounts payable are P5,000,000 (25,000 units at P200/unit) and P20,000,000 respectively. The payables are to be fully paid in January. The budgeted sales for April is 240,000 units. Only 20% of payables are paid during the month of purchase with the remaining settled in the month after purchase. Find the budgeted cost of sales, targeted ending inventory balance required purchases and targeted ending accounts payable for the month of January, February and March January February March Budgeted Cost of Sales Targeted Ending Inventory Balance Required Purchaes Targeted Ending Accounts Payable Balance
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.
For the first quarter of 2021, the target sales amount to 500,000 units. For the months of January, February and March,
these sales be spread at 25%, 30% and 45% respectively. The cost per unit would be P200. It is the policy of the firm to maintain 20%
of the next month’s sales as ending inventory of the current month. The beginning balance of the year for inventories and accounts
payable are P5,000,000 (25,000 units at P200/unit) and P20,000,000 respectively. The payables are to be fully paid in January. The
budgeted sales for April is 240,000 units. Only 20% of payables are paid during the month of purchase with the remaining settled in
the month after purchase.
Find the budgeted cost of sales, targeted ending inventory balance required purchases and targeted ending accounts payable for the month of January, February and March
| January | February | March | |
| Budgeted Cost of Sales | |||
| Targeted Ending Inventory Balance | |||
| Required Purchaes | |||
| Targeted Ending Accounts Payable Balance |
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