Suppose Mallcentral sells 1,000 hardcover books per day at an average price of $30. Assume that Mallcentral’s cost for the books is 75% of the selling price it charges retail customers. Mallcentral has no beginning inventory, but it wants to have a three- day supply of ending inventory. Assume that selling and administrative expenses are $1,000 per day. Determine Mallcentral’s budgeted purchases for the next (seven-day) week. a. $300,000 b. $225,000 c. $157,500 d. $75,000
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.
Suppose Mallcentral sells 1,000 hardcover books per day at an average price of $30. Assume that Mallcentral’s cost for the books is 75% of the selling price it charges retail customers. Mallcentral has no beginning inventory, but it wants to have a three- day supply of ending inventory. Assume that selling and administrative expenses are $1,000 per day.
Determine Mallcentral’s budgeted purchases for the next (seven-day) week.
a. $300,000
b. $225,000
c. $157,500
d. $75,000
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