Tiger Drug Store carries a variety of health and beauty aids, including 500-count bottles of vita-mins. The sales budget for vitamins for the first six months of the year is presented below. Unit Sales Dollar SalesJanuary 170 $1,530February 160 1,440March 180 1,620April 190 1,710May 210 1,890June 200 1,800 The owner of Tiger Drug believes that ending inventories should be sufficient to cover10 percent of the next month’s projected sales. On January 1, 23 bottles of vitamins were ininventory. Required:1. Prepare a merchandise purchases budget in bottles of vitamins for as many months as youcan.2. If vitamins are priced at cost plus 80 percent, what is the dollar cost of purchases for eachmonth of your purchases budget?
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.
Tiger Drug Store carries a variety of health and beauty aids, including 500-count bottles of vita-
mins. The sales budget for vitamins for the first six months of the year is presented below.
Unit Sales Dollar Sales
January 170 $1,530
February 160 1,440
March 180 1,620
April 190 1,710
May 210 1,890
June 200 1,800
The owner of Tiger Drug believes that ending inventories should be sufficient to cover
10 percent of the next month’s projected sales. On January 1, 23 bottles of vitamins were in
inventory.
Required:
1. Prepare a merchandise purchases budget in bottles of vitamins for as many months as you
can.
2. If vitamins are priced at cost plus 80 percent, what is the dollar cost of purchases for each
month of your purchases budget?
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