West Depot is a retaler that is preparing ks budget for the upcoming fiscal year. Management has prepared the folowing summary of ts budgeted cash flows: 1st Quarter 180000 2nd Quarter 340000 3rd Quarter 205000 4th Quarter 235000 Sales Total Cash Disbursments: Direct Material 160000 222000 135000 292000 Drect Labor 40000 55000 34000 73000 Manufacturing Overhead Seling and adrninistrative 38000 13000 45000 62000 82000 15000 21000 27000 The company's beginning cash balance for the upcoming fiscal year will be $15,000. The company requires a minimum cash balance of $5,000 and may borrow any amount needed from a bocal bank at a quarterly interest rate of 4%. The company may borrow any amount at the beginning of any quarter and may repay its bans, or any part of ts bans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. Assime simple interest for the shake of the simplicity.
West Depot is a retaler that is preparing ks budget for the upcoming fiscal year. Management has prepared the folowing summary of ts budgeted cash flows: 1st Quarter 180000 2nd Quarter 340000 3rd Quarter 205000 4th Quarter 235000 Sales Total Cash Disbursments: Direct Material 160000 222000 135000 292000 Drect Labor 40000 55000 34000 73000 Manufacturing Overhead Seling and adrninistrative 38000 13000 45000 62000 82000 15000 21000 27000 The company's beginning cash balance for the upcoming fiscal year will be $15,000. The company requires a minimum cash balance of $5,000 and may borrow any amount needed from a bocal bank at a quarterly interest rate of 4%. The company may borrow any amount at the beginning of any quarter and may repay its bans, or any part of ts bans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. Assime simple interest for the shake of the simplicity.
West Depot is a retaler that is preparing ks budget for the upcoming fiscal year. Management has prepared the folowing summary of ts budgeted cash flows: 1st Quarter 180000 2nd Quarter 340000 3rd Quarter 205000 4th Quarter 235000 Sales Total Cash Disbursments: Direct Material 160000 222000 135000 292000 Drect Labor 40000 55000 34000 73000 Manufacturing Overhead Seling and adrninistrative 38000 13000 45000 62000 82000 15000 21000 27000 The company's beginning cash balance for the upcoming fiscal year will be $15,000. The company requires a minimum cash balance of $5,000 and may borrow any amount needed from a bocal bank at a quarterly interest rate of 4%. The company may borrow any amount at the beginning of any quarter and may repay its bans, or any part of ts bans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. Assime simple interest for the shake of the simplicity.
What is a self imposed budget and what is the advantage of self imposed budget and why sales is considered as the starting point of all budget
Transcribed Image Text:West Depot is a retaler that is preparing its budget for the upcoming fiscal year. Management
has prepared the folowing summary of ts budgeted cash flows:
1st Quarter
180000
3rd Quarter
4th Quarter
2nd Quarter
Sales
Total Cash Disbursments:
Direct Material
340000
205000
235000
160000
222000
135000
292000
Direct Labor
40000
55000
34000
73000
Manufacturing Overhead
Selng and adrministrative
45000
62000
38000
82000
15000
21000
13000
27000
The company's beginning cash balance for the upcoming fiscal year will be $15,000. The company
requires a minimum cash balance of $5,000 and may borrow any amount needed from a bcal
bank at a quarterly interest rate of 4%. The company may borrow any amount at the beginning of
any quarter and may repay its bans, or any part of its lbans, at the end of any quarter. Interest payments
are due on any principal at the time it is repaid. Assime simple interest for the shake of the simplicity.
Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.
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