Master Budget for Smashing Frame Company Essay

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Example for 7-B1 Prepare Master Budget (Please see second page for solution) Smashing Frame Company, a small Melbourne firm that sells frames on the Web, wants a master budget for the three months beginning January 1, 2008. It desires an ending minimum cash balance of $9,000 each month. Sales are forecasted at an average wholesale selling price of $18 per frame. Merchandise costs average $9 per frame. All sales are on credit, payable within 30 days, but experience has shown that 60% of current sales are collected in the current month, 30% in the next month, and 10% in the month thereafter. Bad debts are negligible. In January, Smashing Frame is beginning just-in-time (JIT) deliveries from suppliers, which means that purchases …show more content…

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