Bloomfield is an ice cream company, who makes homestyle ice creams using fresh and all-natural ingredients and sells to retail stores. In preparing the budget for the coming year, 2024, they forecasted the following expected sales and gathered the costs data from managers in various areas of the company. Sales: Forecasted to sell 25,000 units in the 1st Quarter of 2024, and an additional 2,000 units each quarter. The 2,000 additional units per quarter are expected to continue through the end of 2nd quarter of 2025. The 2023 4th quarter sales were 24,000 units. Selling price for one unit of ice cream is $15. Bloomfield maintains 15% of the next quarter's unit sales in ending inventory. All sales to retail stores are on account, with collections of 75% made in the quarter of sales and 25% collected in the quarter after sale. Accounts receivable on December 31, 2023 is $72,000. (1) Prepare a Sales budget (2) Prepare a Production Budget
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.
Bloomfield is an ice cream company, who makes homestyle ice creams using fresh and all-natural ingredients and sells to retail stores. In preparing the budget for the coming year, 2024, they
Sales:
- Forecasted to sell 25,000 units in the 1st Quarter of 2024, and an additional 2,000 units each quarter.
- The 2,000 additional units per quarter are expected to continue through the end of 2nd quarter of 2025.
- The 2023 4th quarter sales were 24,000 units.
- Selling price for one unit of ice cream is $15.
- Bloomfield maintains 15% of the next quarter's unit sales in ending inventory.
- All sales to retail stores are on account, with collections of 75% made in the quarter of sales and 25% collected in the quarter after sale.
- Accounts receivable on December 31, 2023 is $72,000.
(1) Prepare a Sales budget
(2) Prepare a Production Budget
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
