ow, what should the maximum budgeted food costs be?
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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.
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- Cloud Shoes manufactures recovery sandals and is planning on producing 12.000 units in March and 11,500 in April. Each sandal requires 1.2 yards if material, which costs $3.00 per yard. The companys policy is to have enough material on hand to equal 15% of next months production needs and to maintain a finished goods inventory equal to 20% of the next months production needs. What is the budgeted cost of purchases for March?Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of 15.9 million and cost of goods sold of 8.75 million. Advertising is a key part of Coral Seas business strategy, and total marketing expense for the year is budgeted at 2.8 million. Total administrative expenses are expected to be 675,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. 2. What if Coral Seas had interest payments of 500,000 during the year? What effect would that have on operating income? On income before taxes? On net income?Blue Book printing is budgeting sales of 25,000 units and already has 5,000 in beginning inventory. How many units must be produced to also meet the 7,000 units required in ending inventory?
- Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 in April. Each pole requires a half pound of material, which costs $1.20 per pound. The companys policy is to have enough material on hand to equal 10% of the next months production needs and to maintain a finished goods inventory equal to 25% of the next months production needs. What is the budgeted cost of purchases for March?Lovely Wedding printing is budgeting sales of 32,000 units and already has 4,000 in beginning inventory. How many units must be produced to also meet the 6,000 units required in ending inventory?A manager of one Indian restaurant with a take-away service wants to prepare a detailed budget for the next year. The following information is available from the monthly accounts. Calculate the fixed and variable cost elements using the high-low method. Month July August September October November December No. of deliveries 403 291 348 521 387 Total delivery cost (OMR) 662.70 561.90 613.20 627.60 768.90 648.30
- Assume that The AM Bakery is preparing a budget for the month ending November 30. Management prepares the budget by starting with the actual results for August that are shown below. Then, management considers what the differences in costs will be between August and November. Ingredients Flour Butter Oil Fruit Nuts Chocolate Other Total ingredients Labor Channel manager Other Utilities Rent Marketing Total bakery costs Revenues THE AM BAKERY Bakery Sales Actual Costs For the Month Ending August 31 Actual $ 4,100 3,700 1,900 1,400 940 840 440 $ 13,320 $4,600 10,900 2,550 3,750 250 $ 35,370 $ 57,200 Budgeted $ 3,860 3,540 2,040 1,090 880 840 310 $ 12,560 4,600 11,400 2,410 3,750 140 $ 34,860 $57,200 Difference $240 160 (140) 310 60 130 $ 760 (500) 140 110 $510 Management expects revenue in November to be 30 percent higher than in August, and it expects all ingredient costs (e.g., flour, butter, and so on) to be 25 percent higher in November than in August. Management expects "other" labor…Example 1: Purchases Budget Problem for Retailing Concern. Note that the format shown here is the same as would be used for the production and materials purchases budgets for a manufacturing concern. Lair Company is a retailer of leather handbags. The handbags are imported and are sometimes difficult to obtain on short notice. Therefore, the managers want to have 40% of the next month's estimated sales on hand at the end of the month. The Company's sales budget for the first quarter follows: Dollars Units January $200,000 2,000 February 240,000 2,400 March 300,000 3,000 The handbags cost $80 each and sell for $100. Prepare a purchases budget for February.A company sells bags. Next month's budget is as follows: Selling Price=$50/bag Variable Expenses per unit=$25/bag Total Fixed Expenses for one month=$10,000/month Volume of Bag Sales=1,000bags Based on the company's budgeted sales, what is the company's Margin of Safety in dollars? Show all work explanation computation formula with steps
- You have just been hired into a management position which requires the application of your budgeting skills. You find out that budgeting has not been a priority of the company. You have contacted various areas on the organization and have accumulated the information below to assist you in preparing a comprehensive budget. Manufacturing Inc. produces a part used in the production of engines. Actual Sales and Projected sales in units: March (Actual) 38,000 April 40,000 May 42,000 June 45,000 July 44,000 Sales are the following type: 51% Cash sales collected in month of sale 49% Credit sales collected in the following month of sale…Your company manufactures tabies and chairs In your role as a manager you are responsible for the budget preparalion for the quarter ending 30 March 2018 Tho quartor consists of 13 weeks The other managers are inexpenenced, and you decided to do the budget on your own You have accumuiated the following data for the quarter Finished product Tables Chairs Forecasted sales (unts) 5,525 11,050 Seling Price per unit R242 50 R152 00 Inventory opening balance (unta) 450 700 Closing Inventory Tables closing inventory must equal 1 week's sales units Chairs closing inventory must equal 2 week's sales units Raw Materials: Wood Metal Tables (meters per unit) 8m 1m Chairs (meters per unit) 3m O 50m Cost per meter R135 00 R150 00 Opening nventory (meters) 2,000m 750m Closing nventory Wood closing stock must equal 1 week's producton requirement Metal closing stock must equal 1 week's production requirement Required Prepare the following budgets 1 Production budget (Units) 2 Direct material usage…A manager is preparing a revenue budget for next month. The following is the manager’s current month actual operating results. ACTUAL OPERATING RESULTS CURRENT MONTH Revenue Source Number of Guests Average Sale per Guest Sales Restaurant 3492 $20.50 $71,586 Lounge 515 $12.00 $ 6,180 Banquet room 388 $28.50 $11,058 Total 4395 $20.21 $88,824 Create the revenue forecast for next month based on the following assumptions. Restaurant guest counts will be 3,600 with an average sale per guest of $21.00. Lounge guests to be served are estimated at 525 with a 10 percent increase in average sale per guest. The banquet room will serve 425 customers and generate $12,750 in sales. NEXT MONTH BUDGET Revenue Source Number of Guests Average Sale per Guest Sales Restaurant 3,600.00 ? ? Lounge ? ? ? Banquet room ? ? ? Total ? ? ? What will be the manager’s revenue forecast for next month?…