Dozier Company has a problem managing cash. From the following data determine the cash disbursements for the month of May. Sales: April, $16000; May $20,000; June $23,000. Other data are as follows: Purchases of inventory are 60% of sales. Payments of purchases of inventory are made one month after purchase. Selling expenses are 15% of sales and are paid in the same month as the associated sales. Administrative expenses (excluding rent and depreciation) are 20% of sales and are paid in the same month as the associated sales. Rent expenses is $1,200 per month and is paid each month. Equipment depreciation is 5% of sales.
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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