Relevant data from the Poster Company’s operating budgets are: Quarter 1 Quarter 2 Sales $208,480 $211,540 Direct material purchases 115,295 120,832 Direct labor 75,210 73,298 Manufacturing overhead 25,400 25,400 Selling and administrative expenses 33,600 33,400
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.
Relevant data from the Poster Company’s operating budgets are:
| Quarter 1 | Quarter 2 | |
| Sales | $208,480 | $211,540 |
| Direct material purchases | 115,295 | 120,832 |
| Direct labor | 75,210 | 73,298 |
| Manufacturing |
25,400 | 25,400 |
| Selling and administrative expenses | 33,600 | 33,400 |
| 1,600 | 900 | |
| Collections from customers | 215,393 | 240,156 |
| Cash payments for purchases | 114,295 | 119,254 |
Additional data:
Capital assets were sold in January for $9,000 and $4,500 in May.
Dividends of $4,600 were paid in February. The beginning cash balance was $60,359 and a required minimum cash balance is $59,000.
Use this information to prepare a
The Poster Company
Cash Budget
For the First Two Quarters
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