Quarter 1 Quarter 2 Sales $248,470 $251,539 Direct material purchases 120,295
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.
|
|
Quarter 1 |
Quarter 2 |
|
Sales |
$248,470 |
$251,539 |
|
Direct material purchases |
120,295 |
128,832 |
|
Direct labor |
76,553 |
74,289 |
|
Manufacturing overhead |
26,000 |
24,400 |
|
Selling and administration expenses |
33,500 |
33,500 |
|
|
2,000 |
2,500 |
|
|
|
|
|
Collection from customers |
230,524 |
220,116 |
|
Cash payments for purchases |
114,345 |
118,346
|
Relevant data from Picta Company’s operating budgets are presented below. The company’s financial year ends on 30 June.
Additional data:
Equipment was sold in July for $8,000 and $4,500 in November. Dividends of $5,500 were paid in August. The beginning cash balance was $80,395 and a required minimum cash balance per quarter is $60,000. The company has a 15% open line of credit for $70 000 with their bank.
Required: Use this information to prepare a
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