Blossom Company estimates that 2020 sales will be $40000 in quarter 1, $48000 in quarter 2, and $58000 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 12% of the next quarter’s expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2020.
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.
Blossom Company estimates that 2020 sales will be $40000 in quarter 1, $48000 in quarter 2, and $58000 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 12% of the next quarter’s expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2020.
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