ADMN 3021H Lecture Notes - Lecture 6: Budget, Cash Flow, Accounts Receivable
30 Mar 2020
School
Department
Course
Professor
Document Summary
Each department puts together their own, then finance puts everything together. Cash flow budget after direct materials, etc. Quarter total budgeted sales is the revenue to report in income statement. Royal company is preparing budgets for the quarter ending june 30. Budgeting sales for the next 5 months are: april 20,000 units, may 50,000 units. The selling price is per unit. First document to prepare is the sales budget. The sales budget the individual months of april, may, and june and summed to obtain the total projected sales in units and dollars for the quarter ended june 30th sometimes selling price changes over time. Expected cash collections all sales are on account: could be cash on account. Production must be adequate to meet budgeted sales and provide for sufficient ending inventory the management at royal company wants the ending inventory to be equal to 20% of the following month"s budgeted sales in units.
