Question

Printer Office Supply's March 31, 2018, balance sheet follows: E: (Click the icon to view the balance sheet.) The budget committee of Printer Office Supply has assembled t following data: (Click the icon to view the data.) Read the requirements. Requirement 1. Prepare Printer's sales budget for April and May 2018. Round all amounts to the nearest dollar. Printer Office Supply Sales Budget Anril and Max 2018 More Info Total budg Requireme a. b. C. d. Sales in April are expected to be $80,000. Printer forecasts that monthly sales will increase 2% over April sales in May. June's sales will increase by 4% over April sales. July sales will increase 20% over April sales. Printer maintains inventory of $10,000 plus 25% of the cost of goods sold budgeted for the following month. Cost of goods sold equal 50% of sales revenue. Monthly salaries amount to $5,000. Sales commissions equal 5% of sales for that month. Other monthly expenses are as follows: • Rent: $3,400 • Depreciation: $800 • Insurance: $400 • Income tax: $2,500 Plus: Total merch Less: Print Done Budgeted

Answer 1

Sales Budget Particulars Total Budgeted Sales April May June $ 80,000 $ 81,600 $ 83,200 Explanation : April Sales = Given | May Sales = $ 80,000 * 102% | June Sales = $ 80,000 * 104% June 41,600 Inventory, Purchases and Cost of Goods Sold Budget Particulars April May Cost of Goods Sold $ 40,000 $ 40,800 $ Add : Desired Ending Inventory $ 20,200 $ 20,400 Total Merchandise Inventory required $ 60,200 $ 61,200 Less : Beginning Merchandise Inventory $ 20,000 $ 20,200 Budgeted Purchases $ 40,200 $ 41,000 Explanation : Cost of Goods Sold = Sales in Sales Budget for respective Month * 50% Desired Ending Inventory : April = $ 10,000 + (25%* May's COGS) [i.e., $ 10,000 + ($ 40,800 * 25%)] May = $ 10,000 + (25%* June's COGS) [i.e., $ 10,000 + ($ 41,600 * 25%)] Beginning Inventory : Ending Inventory of Previous Month (or) $ 10,000 + Current Months's COGS * 25% April May Calculation Selling and Administrative Expenses Budget Particulars Variable Expenses : - Commissions Expense $ $ 4,000 $ 4,080 [Sales * 5%] Fixed Expenses : - Salaries - Rent - Depreciation - Insurance Total Fixed Expenses A A A $ 5,000 $ 5,000 [Given] $ 3,400 $ 3,400 (Given] $ 800 $ 800 [Given] $ 2,500 $ 2,500 [Given] $ 11,700 $ 11,700 Total Selling and Administrative Expenses $ 15,700 $ 15,780