Describe potential advantages of top-down budgeting approach

Reference no: EM131972289

Problem

Sales for the 4 quarters of 2013 are expected to be $648,000, $589,000, $604,000, and $750,000, for an annual total of $2,591,000.

Cost of goods sold averages 39% of sales. Ending inventory for each quarter should be 15% of cost of goods sold for the following quarter. Inventory at January 1 is expected to be $75,000.

Required:

a. Show calculations for ending inventory, purchases, and cost of goods sold for the first 3 quarters of 2017.

b. Briefly describe the potential advantages of the top-down budgeting approach in use at this time. What risks, if any, does the company face because of this strategy?

Reference no: EM131972289

Questions Cloud

What level of sales could mitchell have obtained : What level of sales could Mitchell have obtained if it had been operating at full capacity? Round your answer to the nearest dollar.

How much money is she guaranteed to have at the end year : The MacIntosh Company has an employee savings plan that allows every employee to invest up to 5% of his or her annual salary.

Issuing bonds denominated in euros : How an MNC based in the USA may be able to offset a portion of its exchange rate risk by issuing bonds denominated in euros?

Earn an average rate of return : How much more will you have at the end of 24 years if you invest your money at the beginning rather than the end of each month?

Describe potential advantages of top-down budgeting approach : Describe the potential advantages of the top-down budgeting approach in use at this time. What risks, if any, does the company face because of this strategy?

Calculate what is the value of the bond : Macy's has a level-coupon bond outstanding with $90.00 coupon interest payment, payable annually.

Company cash flow to creditors during the year : The net working capital at the beginning of the year was $6,474 and it was $7,880 at the end of the year. What was the company's cash flow to creditors during

Write a paragraph in which you present the main ideas : Write a paragraph in which you present the main idea(s) you think the company should present to shareholders in the annual report.

Write report that requires preparation of a project plan : PLAN7901 Principle of Project Management - Project Plan Assignment. You are required to write a management report that requires preparation of a project plan

User Account

All Pages