The budget committee of Crane Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2022. 1. 2 3. 4. Sales for May are expected to be $880,000. Sales in June and July are expected to be 5% higher than the preceding month. Cost of goods sold is expected to be 75% of sales. Company policy is to maintain ending merchandise inventory at 10% of the following month's cost of goods sold. Operating expenses are estimated to be as follows: Sales salaries Advertising Delivery expense Sales commissions Rent expense Depreciation Utilities Insurance $28,000 6% 2 % 5% $5,100 $810 $610 $510 per month of monthly sales of monthly sales of monthly sales per month per month per month per month
The budget committee of Crane Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2022. 1. 2 3. 4. Sales for May are expected to be $880,000. Sales in June and July are expected to be 5% higher than the preceding month. Cost of goods sold is expected to be 75% of sales. Company policy is to maintain ending merchandise inventory at 10% of the following month's cost of goods sold. Operating expenses are estimated to be as follows: Sales salaries Advertising Delivery expense Sales commissions Rent expense Depreciation Utilities Insurance $28,000 6% 2 % 5% $5,100 $810 $610 $510 per month of monthly sales of monthly sales of monthly sales per month per month per month per month
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
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Transcribed Image Text:5.
Interest expense is $2,000 per month. Income taxes are estimated to be 20% of income before income taxes.
Total
Less : Budgeted Cost of Goods Sold
Beginning Merchandise Inventory
Add
Direct Materials Purchases
CRANE COMPANY
San Miguel Store
Merchandise Purchases Budget
For the Months of May and June, 2022
May
$
CRANE COMPANY
San Miguel Store
Budgeted Income Statement
$
Prepare budgeted multiple-step income statements for each month in columnar form. Show in the statements the details of cost
of goods sold.
May
June
June
Transcribed Image Text:The budget committee of Crane Company collects the following data for its San Miguel Store in preparing budgeted income
statements for May and June 2022.
1.
2.
3.
4.
Sales for May are expected to be $880,000. Sales in June and July are expected to be 5% higher than the preceding month.
Cost of goods sold is expected to be 75% of sales.
Company policy is to maintain ending merchandise inventory at 10% of the following month's cost of goods sold.
Operating expenses are estimated to be as follows:
Sales salaries
Advertising
Delivery expense
Sales commissions
Rent expense
Depreciation
Utilities
Insurance
$28,000
per month
6% of monthly
sales
2% of monthly sales
5% of monthly sales
per month
per month
per month
per month
$5,100
$810
$610
$510
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