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Parameters: Estimated sales: Cheese (160,000 hoops at $10 each) Milk 240,000 gallons at $5 each Estimated Costs Cheese 8.00 per hoop Millk 2.00 per gallon

Parameters:

Estimated sales:

Cheese (160,000 hoops at $10 each)

Milk 240,000 gallons at $5 each

Estimated Costs

Cheese 8.00 per hoop

Millk 2.00 per gallon

Desired inventories

Cheese: 10,000 Beginning, 12,000 ending

Milk 4,000 Beginning, 5,000 ending

  • Beginning cash balance is $700,000
  • Purchases of merchandise are paid 60% in the current month and 40% in the following month. Purchases totaled $1,800,000 in April and are estimated to be $2,000,000 in June 2021.
  • Employee wages and salaries are paid for in the current month. Employee Expenses for May totaled $156,000.
  • Overhead expenses are paid in the next month. The accounts payable amount for these expenses from April is $80,000 and for June will be $90,000. Mays overhead expenses total $80,000.
  • Sales are on credit and are collected 70% in the current period and the remainder in the next period. Aprils sales were $3,000,000 and Junes sales are estimated to be $3,200,000. Bad debts average 1% of sales.
  • Selling and administrative expenses are paid monthly and total $450,000, including $50,000 of depreciation.
  • All unit costs for May are the same as they were in April.

Questions:

  1. Sales budget
  2. Purchase Budget
  3. Cash Budget
  4. Budgeted Income Statement.

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