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Web Chapter 23 Exercises

Web Chapter 23 Exercises - MasterBudgetsand...

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Master Budgets and  Master Budgets and  Planning Planning Chapter 23 Chapter 23 NOTE: Focus on all pages NOTE: Focus on all pages
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Example Problem Example Problem (Purchases Budget) (Purchases Budget) Jackson Furniture Company buys and sells tables; its 2008 sales budget is as follows: The January 1, 2008 inventory is 80 tables. Management desires an ending inventory each quarter equal to 20% of the next quarter’s sales. Each table costs $300 which is expected to increase by 20% in Q3. Prepare a quarterly purchases budget (quarters 1-3 only) for the year. Quarter Units 1 500 2 700 3 800 4 1,000
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Example Problem Example Problem (Purchases Budget) (Purchases Budget) 1 2 3 Budgeted sales (in units) 500 700 800 Desired ending inventory percentage 20% 20% 20% Budgeted ending inventory 140 160 200 Total units required 640 860 1,000 Beginning inventory 80 140 160 Required purchases (in units) 560 720 840 Cost per unit $300 $300 $360 Total of purchases $168,000 $216,000 $302,400 Quarter Jackson Furniture Purchases Budget
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Example Problem Example Problem
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