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5. Be familiar with the process of developing a sales budget and cash receipts budget. 6....

5. Be familiar with the process of developing a sales budget and cash receipts budget. 6. What is the calculation used to determine an inventory purchases budget?

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Answer #1

Sale Budget telss the amount of cash sells and credit sales where a cash receipt budget records every record being from sales loan, Investment, Dividend etc. The calculation of an inventory purchases budget is as follows:

Direct material Purchase budget
First Second Third Fourth
Budgeted Production in units
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
Add: Closing Inventory
Total units of raw material needed
Less: Opening Inventory
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw material purchaes
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