10014_042110_18 - DM Budget = Number of units of DM...

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DM Budget = Number of units of DM (production) that must be purchased (desired Ending Inventory for each period) In doing calculations for quantity: Beginning FG Inventory from the first month of the quarter Ending FG Inventory from the last month of the quarter Common error – begin calculations with sales units (Not always – get the production units) Chapter 9 Class Example (Handout) Informal Cash Budget Cash coming in (from sales) Cash going out (for DM) Ending cash balance Beginning Cash 8,000 + Cash Collected 8,700 Available Cash 16,700 - Disbursements Equipment <9,000> Op. Expenses <2,000> DM Purchase <1,589> (Account Payable from DM Schedule) <12,589> Excess Cash $4,111 ***Never include depreciation in disbursements Financing: + Borrowing 18,000 - Repaying <15,000> - Paid Interest <500> Ending Cash $6,611 ***This is the cash on 3/31/10 Balance sheet proforma Examples (from handout) 1. Compute Beginning FG Inventory for March. 360 units How much do we need to have?
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This note was uploaded on 08/25/2010 for the course ACCT 208 taught by Professor Kingery during the Spring '08 term at University of Delaware.

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10014_042110_18 - DM Budget = Number of units of DM...

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