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.
Icy Treats Inc. is a seasonal business that sells frozen desserts. At the peak of its summer selling season, the firm has P45,000 in cash, P120,000 in inventory, P80,000 in accounts receivable and P65,000 in accounts payable. During the slow winter period, the firm holds P10,000 in cash, P40,000 in inventory, P60,000 in accounts receivable and P25,000 in accounts payable.
Requirement:
- Calculate Icy Treat’s minimum and peak funding requirements
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