Use the following income statement along with the accompanying additional information to prepare a monthly operational budget for Tom's Business. Additional Information: Sales are anticipated to increase by 5% each month Cost of Goods Sold will remain at its current percentage of sales Rent is going up to $550 per month next year Wages should run at 6% of sales Utilities and auto maintenance will remain the same Advertising will increase by 10% in the same months as the current year 2019 Cost of Goods Sold Rent Wages Insurance Utilities Auto Maintenance Advertising Other Expenses Total Expenses Net Income Jn Feb 3250 2700 1,788 1,485 175 46 230 400 98 2.801 360 175 46 225 40 81 2.577 123 Mar ៖ ៩ ៖ ២ ទី + 3 & ទី 2,120 3,407 *. .*.**TER 1,790 Tom's Business Income Statement 2019 May 3.000 2008 525 175 46 200 40 * 110 2000 3100 Jun 5 9 1 & £ + y ® 9 = គឺ F 21000 1,508 175 46 186 80 2724 126 કસક = ૩૩ કદ Aug Sep Od 2010 22000 2250 1,106 1,210 525 175 46 206 40 BOD & + ខ ខ វ 175 According to your 2020 operational budget: 46 210 80 2217 2.372 (207) (172) 1238 525 175 46 186 40 (B 2276 (26) a. What are your estimated sales for January 2020? b. What is your estimated cost of goods sold for February 2020? Nov 3,756 2006 2.000 175 46 230 0 Total 4800 37.264 20,406 6.300 2,100 560 c. What is your estimate in wages for June 2020? d. What is your estimate in advertising expense for March 2020? e. What is your estimated net income for September 2020? 175 46 230 10 (0 1407 113 3,184 3.962 571 2867 6410 240 1.118 34,100 908 3164
Use the following income statement along with the accompanying additional information to prepare a monthly operational budget for Tom's Business. Additional Information: Sales are anticipated to increase by 5% each month Cost of Goods Sold will remain at its current percentage of sales Rent is going up to $550 per month next year Wages should run at 6% of sales Utilities and auto maintenance will remain the same Advertising will increase by 10% in the same months as the current year 2019 Cost of Goods Sold Rent Wages Insurance Utilities Auto Maintenance Advertising Other Expenses Total Expenses Net Income Jn Feb 3250 2700 1,788 1,485 175 46 230 400 98 2.801 360 175 46 225 40 81 2.577 123 Mar ៖ ៩ ៖ ២ ទី + 3 & ទី 2,120 3,407 *. .*.**TER 1,790 Tom's Business Income Statement 2019 May 3.000 2008 525 175 46 200 40 * 110 2000 3100 Jun 5 9 1 & £ + y ® 9 = គឺ F 21000 1,508 175 46 186 80 2724 126 કસક = ૩૩ કદ Aug Sep Od 2010 22000 2250 1,106 1,210 525 175 46 206 40 BOD & + ខ ខ វ 175 According to your 2020 operational budget: 46 210 80 2217 2.372 (207) (172) 1238 525 175 46 186 40 (B 2276 (26) a. What are your estimated sales for January 2020? b. What is your estimated cost of goods sold for February 2020? Nov 3,756 2006 2.000 175 46 230 0 Total 4800 37.264 20,406 6.300 2,100 560 c. What is your estimate in wages for June 2020? d. What is your estimate in advertising expense for March 2020? e. What is your estimated net income for September 2020? 175 46 230 10 (0 1407 113 3,184 3.962 571 2867 6410 240 1.118 34,100 908 3164
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 7DQ
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Concept explainers
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.
Question
Transcribed Image Text:2019
Sales
Cost of Goods Sold
Rent
Wages
Insurance
Utilities
Auto Maintenance
Advertising
Other Expenses
Total Expenses
Net Income
Jan
3,250
1,788
525
175
46
220
40
98
2,891
359
Feb
2,700
1,485
525
175
46
225
40
81
2,577
123
Mar
3,855
2,120
525
175
46
285
80
60
116
3,407
448
Tom's Business
Income Statement
98
2,900
354
2019
May
Jul Aug
Sep
Oct
Nov
Dec
Total
Apr
3,254 3,650 2,850 2,600 2010 2,200 2,250 3,755 4,890 37,264
1,790 2,008
1,106
1,210
1,238
2,065
2,690 20,495
525
525
525
525
525
525
6,300
2,100
175
175
175
175
175
175
46
46
46
46
46
46
550
227
265
210
185
220
230
2,657
40
40
40
80
640
60
147
525
175
46
200
40
110
Jun
588 * º * * * 88 * §
547
1,568
525
175
46
185
80
60
86
3,103 2,724
126
1,430
525
175
46
205
40
78
2,499
101
40
60
2217
(207)
80
60
66
2,372
(172)
68
2,276
(26)
113
3,184 3,952
571
938
240
1,118
34,100
3,164
Transcribed Image Text:0
Use the following income statement along
with the accompanying additional information to
prepare a monthly operational budget for Tom's
Business.
Additional Information:
Sales are anticipated to increase by 5% each month
Cost of Goods Sold will remain at its current
percentage of sales
Rent is going up to $550 per month next year
Wages should run at 6% of sales
Utilities and auto maintenance will remain the same
Advertising will increase by 10% in the same
as the current year
months
2019
Saks
Cost of Goods Sold
Rent
Wages
Insurance
Utilities
Auto Maintenance
Advertising
Other Expenses
Total Expenses
Net Income
Jin
3,250
1,788
175
46
220
40
98
2.891
350
Feb Mar
2,700 3.866
1,485
175
46
*
225
40
81
2577
123
2120
525
46
€
216
80
175 175 175
46
46
200
46
ED
116
3,407
4418
Tom's Business
Income Statement
40
2019
Apr May
3,650 2.850
3254
1,790 2008 1,568 1,430
525
98
2,900
354
40
110
3,103
SERAL*******
547
Jun
525
175
46
186
60
86
2724
Ju
125
2,600 2010
1,106
525
175
46
205
40
.*.***
78
2.400
* 2 * * * * * * * 5 €
*****
101 (207)
Sep
2.200
1210
According to your 2020 operational budget:
175
46
210
80
Od
2.250
1238
525
175
46
186
40
68
B
Nov
a. What are your estimated sales for January 2020?
b. What is your estimated cost of goods sold for
February 2020?
9
3.756 4,890
**********
Dec
c. What is your estimate in wages for June 2020?
d. What is your estimate in advertising expense for
March 2020?
e. What is your estimated net income for September
2020?
175
46
2217 2.372 2.276 3,184 3.962
(172) (26)
230
60
147
×
Total
37214
6.300
2,100
560
2867
640
240
1,118
34,100
908 3164
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