The following data have been taken from the budget reports of Kenyon Company, a merchandising company. Purchases Sales January $ 188,000 $ 128,000 February $ 188,000 $ 228,000 March $ 188,000 $ 268,000 April $ 168,000 $ 328,000 May $ 168,000 $ 288,000 June $ 148,000 $ 268,000 Forty percent of purchases are paid for in cash at the time of purchase
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.
The following data have been taken from the budget reports of Kenyon Company, a merchandising company.
| Purchases | Sales | ||||||
| January | $ | 188,000 | $ | 128,000 | |||
| February | $ | 188,000 | $ | 228,000 | |||
| March | $ | 188,000 | $ | 268,000 | |||
| April | $ | 168,000 | $ | 328,000 | |||
| May | $ | 168,000 | $ | 288,000 | |||
| June | $ | 148,000 | $ | 268,000 | |||
Forty percent of purchases are paid for in cash at the time of purchase, and 30% are paid for in each of the next two months. Purchases for the previous November and December were $178,000 per month. Employee wages are 10% of sales for the month in which the sales occur. Marketing and administrative expenses are 20% of the following month's sales. (July sales are budgeted to be $248,000.) Interest payments of $48,000 are paid quarterly in January and April. Kenyon's cash disbursements for the month of April would be: (CMA adapted)
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$175,000.
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$318,400.
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$250,709.
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$310,879.
Interest payments of $48,000 the cash paid for each quarter
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