You are given the following information related to ABC manufacturing company Month Budgeted Sales March $200,000 April 212,000 May 204,000 June 218,000 July 210,000 In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month's cost of sales. Required: Prepare a purchases budget for April through June.
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.
A.
You are given the following information related to ABC manufacturing company
Month Budgeted Sales
March $200,000
April 212,000
May 204,000
June 218,000
July 210,000
In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month's
cost of sales.
Required:
Prepare a purchases budget for April through June.
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