Question

B6 A C F XYZ Company 1 Sales Budget 2 For October, November, December 2013 4 October November December Total 5 6 Cash Sales (35%) 7 Credit Sales (65%) 8 Total Sales 10 Assumptions 11 September Sales=$68,000 12 October Sales increase by 2 % 13 November Sales increase by 1% from October 14 December Sales increase by 2.5% from November Operating Expense Bud... Cost of Goods Sold Budget Sales Budget Pro Forma Income Statement Enter Et e

prepare the operating budget for the XYZ Company

Answer 1

Required Budgets are as prepared below:

XYZ Company
Sales Budget
For October, November, December 2013
	Month
Particulars	October	November	December	Total
Cash Sales (35%)	24,276	24,519	25,132	73,926
Credit Sales (65%)	45,084	45,535	46,673	137,292
Total Sales	69,360	70,054	71,805	211,219
September Sales	68,000
October Sales (2% increase)	69,360
November Sales (1% increase)	70,054
December Sales (2.5% increase)	71,805

XYZ Company
Cost of goods sold budget
For October, November, December 2013
	Month
Particulars	October	November	December	Total
Cost of goods sold	41,616	42,032	43,083	126,731
Desired Ending Inventory	44,131	44,423	45,158	45,158
Total inventory required	85,747	86,455	88,241	171,889
Less: Beginning inventory	42,000	44,131	44,423	42,000
Purchases required	43,747	42,323	43,819	129,889
XYZ Company
Operating Expense Budget
For October, November, December 2013
	Month
Particulars	October	November	December	Total
Salaries Expense	10,404	10,508	10,771	31,683
Depreciation Expense	2,000	2,000	2,000	6,000
Other Operating Expenses	6,936	7,005	7,180	21,122
Total operating expenses	19,340	19,513	19,951	58,805
XYZ Company
Proforma Income Statement
Quarter Ending December 31, 2013
	Vertical
Particulars	Analysis
Sales	211,219
Cost of Goods Sold	126,731
Gross profit	84,487
Operating Expenses:
Salaries Expense	31,683
Depreciation Expense	6,000
Other Operating Expenses	21,122
Total Expense	58,805
Net Income	25,683