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Ch 20 static budget example

Ch 20 static budget example - 100,000 80,000 140,000...

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Sales Budget Oct 2008 thru Jan 2009 Budgeted Budgeted Budgeted Sales Budget Unit sales Unit price Total sales Sep-08 ACTUAL 700 $100 $70,000 Oct-08 Budget 1,000 100 100,000 Nov-08 Budget 800 100 80,000 Dec-08 Budget 1,400 100 140,000 Total for the quarter ended 3,200 300 320,000 9-Jan Budget 900 100 90,000 Merchandise Purchases Budget Oct thru Dec 2008 Next month's budgeted sales in units 800 1,400 900 Ratio of inventory to future sales 90% 90% 90% Budgeted ending inventory in units 720 1,260 810 Add budgeted sales in units 1,000 800 1,400 3200 units at $60 per unit = 192,000 Required units of available inventory 1,720 2,060 2,210 Deduct beginning inventory 900 720 1,260 Units to be purchased 820 1,340 950 Budgeted cost per unit $60 $60 $60 Budgeted total cost in dollars $49,200 $80,400 $57,000 Selling Expense Budget OCT NOV DEC Total Budgeted sales
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Unformatted text preview: 100,000 80,000 140,000 320,000 Sales commission percent 10% 10% 10% 10% sales commissions 10,000 8,000 14,000 32,000 Salary for sales manager 2,000 2,000 2,000 6,000 Total Selling expenses 12,000 10,000 16,000 38,000 G&A Budget Administrative salaries 4,500 4,500 4,500 13,500 Depreciation on equipment 1,500 1,500 1,500 4,500 Total G&A expenses 6,000 6,000 6,000 18,000 Budgeted Income Statement Quarter ended Dec 31, 2008 Sales from above 320,000 Cost of goods sold 192,000 Gross Profit 128,000 Operating expenses Sales commissions 32,000 Sales salaries 6,000 Administrative salaries 13,500 Depreciation on equipment 4,500 Interest expense (a given in this example) 328 56,328 Income before income taxes 71,672 Income tax expense (assumed rate of 40%) 28,669 Net income 43,003...
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