oque Company has been accumulating operating data in order to prepare an annual profit plan. Details regarding Roque’s sales for the first 6 months of the coming year are as follows: Forecasted sales January P600,000; February P650,000; March P700,000; April P625,000; May P720,000; June P800,000 Types of sales Cash sales 20% Credit sales 80% Collection Pattern for Credit Sales Month of sale 30% One month following sale 40% Second month following sales 25% Roque’s cost of goods sold averages 40% of the sales value. Roque’s objective is to maintain a target inventory equal to 30% of the next month’s sales in units. Purchases of merchandise for resale are paid for in the month following the sale. The variable operating expenses (other tan cost of goods sold) for Roque are 10% of sales and are paid for in the month following the sale. The annual fixed operating expenses are presented below. All of these are incurred uniformly throughout the year and paid monthly except for insurance and property taxes. Insurance is paid quarterly in January, April, July and October. Property taxes are paid twice a year in April and October. Advertising P720,000 Depreciation P420,000 Insurance P180,000 Property Taxes P240,000 Salaries P1,080,000 The total cash disbursements for operating expenses (excluding COGS) during April will be? The purchase of merchandise that Roque Company will need to make during February will be? Roque Company’s total cash receipts for the month of April will be?
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.
Roque Company has been accumulating operating data in order to prepare an annual profit plan. Details regarding Roque’s sales for the first 6 months of the coming year are as follows:
January P600,000; February P650,000; March P700,000; April P625,000; May P720,000; June P800,000
Types of sales
Cash sales 20%
Credit sales 80%
Collection Pattern for Credit Sales
Month of sale 30%
One month following sale 40%
Second month following sales 25%
Roque’s cost of goods sold averages 40% of the sales value. Roque’s objective is to maintain a target inventory equal to 30% of the next month’s sales in units. Purchases of merchandise for resale are paid for in the month following the sale. The variable operating expenses (other tan cost of goods sold) for Roque are 10% of sales and are paid for in the month following the sale.
The annual fixed operating expenses are presented below. All of these are incurred uniformly throughout the year and paid monthly except for insurance and property taxes. Insurance is paid quarterly in January, April, July and October. Property taxes are paid twice a year in April and October.
Advertising P720,000
Depreciation P420,000
Insurance P180,000
Property Taxes P240,000
Salaries P1,080,000
The total cash disbursements for operating expenses (excluding COGS) during April will be?
The purchase of merchandise that Roque Company will need to make during February will be?
Roque Company’s total cash receipts for the month of April will be?
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