increase inventory turnover from its present level of 9 times a year to a level of 12 times per year
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.
Pronghorn Company’s budgeted sales and budgeted cost of goods sold for the coming year are $137,590,000 and $87,840,000, respectively. Short-term interest rates are expected to average 10%. If Pronghorn can increase inventory turnover from its present level of 9 times a year to a level of 12 times per year.
Compute its expected cost savings for the coming year.
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