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Example (1): Mostafa Company is preparing budgets for the quarter ending March 31, 2021. Budgeted sales for the next 4 months are as follows:
Example (1): Mostafa Company is preparing budgets for the quarter ending March 31, 2021. Budgeted sales for the next 4 months are as follows: 1 100 units 2 300 units 3 200 units Additional Information: 1- The selling price is $10 per unit. 2- Mostafa's collection pattern is to collect 100% of sales during the same month of sales. 3- The management wants ending inventory of product to be equal to 10% of the following month's budgeted sales in units. 4- Each unit of product required 2 Kg. of Material. The management wants ending inventory of material to be equal to 10% of the current month's budgeted production needs. The production needs during December 2020 were 140 Kg. The purchase price is $0.5 per Kg. 5- Mostafa's payment pattern is to pay 100% of purchases during the same month of purchase. 6- Cash payment for Direct Labor, Manufacturing Overhead, and Selling & Administrative costs during this quarter estimated as follows: Cash payments for DL Cash payments for MOH Cash payments for S&A Q 1,743 456 2,599 150 120 370 200 100 475 7- The company Will purchase a new equipment during January of $600 in cash. Also, it will declare dividends of $1,200 during February, & it is expected to pay all dividends during the same month. 8- The company has a January, 1 cash balance of $500. 9- The company maintains a minimum cash balance of $400. Required: prepare the following budgets: 1- Sales Budget. 2- Production Budget. 3- Material Budget. 4- Cash Budget. 4 500 units 400 100 175 (1): Sales Budget & in dollars as follows:
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Step: 1
To prepare the Sales Budget we need to multiply the budgeted sales units for each month by the selling price per unit Heres the Sales Budget for Mostafa Company Sales Budget Month Units Selling Price ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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