221_Solutions_Chap_11_Fa_05

221_Solutions_Chap_11_Fa_05 - Operational Budgeting and...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Operational Budgeting and Profit Planning 1 E11-25 The Music Shop Purchases Budget January - May, 2008 January February March April May Purchase units: Budgeted sales 130,000 160,000 200,000 210,000 180,000 Plus desired end. inv.* 64,000 80,000 84,000 72,000 96,000 Total inventory needs 194,000 240,000 284,000 282,000 276,000 Less beginning inv. (40,000 ) (64,000 ) (80,000 ) (84,000) (72,000 ) Purchases 154,000 176,000 204,000 198,000 204,000 *For example, 40% of the following month's sales, 240,000 × 0.40 for May. January February March April May Purchase dollars ($5 per unit): Budgeted cost of. sales $650,000 $800,000 $1,000,000 $1,050,000 $900,000 Plus desired end. inv.* 320,000 400,000 420,000 360,000 480,000 Total inventory needs $970,000 $1,200,000 $1,420,000 $1,410,000 $1,380,000 Less beginning inv. (200,000 ) (320,000 ) (400,000 ) (420,000 ) (360,000 ) Purchase dollars $770,000 $880,000 $1,020,000 $990,000 $1,020,000 *For example, 40% of the following month's sales, $1,050,000 x 0.40 for March.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon