Cash budget is the budget that prepares to estimate the expected receipts and payments of cash for a particulars period. This budget is prepared based on the various operating budgets and capital expenditures incurred during that period in addition to the above dividends and interests paid, and ant other receipts are form part of cash budget
Cash budget for September:
Cash budget of the company:
The company could accelerate the collection of accounts receivable, slow down the payment of accounts payable, or use other financing activities, such as make a bank loan or issue bonds or stocks.
Cost of goods sold is a schedule used to calculate the total cost of the products, which are produced in a factory. This schedule is reports the total costs of goods sold.
Compute the cost of goods sold of two items dealt by the company:
The ending inventory for Jewelry in April is
The ending inventory for Watches in April is
The ending inventory for Jewelry in May is
The ending inventory for Watches in May is
Therefore, the purchase budget for Jewelry in May is
The purchase budget for Watches in May is
(a) Calculate the number of OS's ounces required to be purchased in each of the two quarters:
Steps to calculate the Usage:
• Consider the beginning inventory.
• Then, add purchases to the beginning inventory to arrive at raw materials available for use.
• Deduct the ending inventory from raw materials available for use to arrive at usage.
Calculate the purchased amount of OS's ounces made by working backward up the model:
• Consider usage value for Quarter I and Quarter II.
• Then add the ending inventory to usage to arrive at raw materials available for use.
• Deduct the beginning inventory from raw materials available for use to arrive at Purchases.
Hence, the numbers of ounces of ocean scent for the first two quarters are
(b) Reason for management plans for an ending inventory instead of planning to purchase:
The management has an idea that inventory would provide a moderate support for delays or excessive production requirements in case of further production. Hence, it wants to keep an ending inventory for each quarter.