Prepare sales revenue budget based on the last year's performance.

The unit sales price is CHF12. The company projected a 5% increase in sales compared to the same period last year. The average price per unit is CHF12.

January

February

March

April

2018 Unit Sales

14 400

19 200

21 600

22 000

2019 Unit Sales

2019 Gross Sale Revenue (CHF)

Task 2: Prepare cash receipts budget (for the 1st Quarter) based on your estimated Gross Sale revenues. Note that only 35% of your Gross Sales are made for cash and 65% are on credit. Credit sales are converted into cash one month after the sale.

Past experience shows that only 80% of credit sales are settled within the required period. 20% of these credits are actually paid one month later (i.e. 2 months after the sale). Note:

The previous year's cash outstanding from sales has been assumed zero.

2019

January

February

March

Gross Sales Revenue

2460

Cash (35%)

Credit (65%)

80% of Credit paid in 1m

0

20% of Credit paid in 2m

0

0

TOTAL CASH RECEIPTS

Task 3: Prepare purchasing budget.

The company's inventory policy requires them to keep 10% of the next months' purchases in their ending inventory. Using Unit Sales you have budgeted for in task 1 determine you purchases budget. Your beginning inventory in January was 1 512 units.

Your Cost of Sales (i.e. purchasing price) is 20% of your unit sales price (task 1).