Rampaga Limited is currently preparing budgets for September to December. Its estimated sales figures in units are as follows: September October November December Sales (units) 5,944 3,704 12,860 16,100 Inventories at 31 August totalled 15,991 units, and inventories are to be kept at a constant level for all months except December, when opening inventories on 1 December are to be increased to 22,160. Inventories will revert to the normal level on 31 December. Inventories will cost £2 per unit throughout the period, and suppliers allow Rampaga Ltd to pay in the month following an order. Other relevant information is that 3,359 units were bought in August. Requirement 1: Prepare Rampaga Ltd's inventories budget (in units) for September to December. Requirement 2: Prepare the information relevant to inventories purchases that would appear in the cash budget for the period. Requirement 1: Rampaga Ltd's inventories budget (in units) is as follows: (Fill in the relevant cells with its corresponding figures. Negative figures should be entered in brackets.) September October November December Opening inventories (A) Sales forecast (B) A - B = (C) Inventories purchase* (E - C) Closing inventories (E) * same as 'sales forecast' for each month except November and December, when inventories increase and then revert to normal. Requirement 2: Relevant information relating to inventories purchases for the cash budget is as follows: (Fill in the relevant cells with its corresponding figures.) August September October November December Inventories purchased (units) (A) Cost per unit (£) (B) 2 2 2 2 2 Cost of inventories bought (£) [A*B = (C)] Cash outflow (£)
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.
|
September
|
October
|
November
|
December
|
Sales (units)
|
5,944
|
3,704
|
12,860
|
16,100
|
|
September
|
October
|
November
|
December
|
Opening inventories (A)
|
|
|
|
|
Sales
|
|
|
|
|
A - B = (C)
|
|
|
|
|
Inventories purchase* (E - C)
|
|
|
|
|
Closing inventories (E)
|
|
|
|
|
|
August
|
September
|
October
|
November
|
December
|
Inventories purchased (units) (A)
|
|
|
|
|
|
Cost per unit (£) (B)
|
2
|
2
|
2
|
2
|
2
|
Cost of inventories bought (£) [A*B = (C)]
|
|
|
|
|
|
|
|
|
|
|
|
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)