Inventory Purchases Budget for a Merchandising Firm
Inventory Purchases Budget for a Merchandising Firm:
Learning Objectives:
- Define and explain an inventory budget.
- Prepare an inventory budget or merchandising purchase budget.
Manufacturing firms prepare production budget but merchandising firms prepare merchandising purchase budget instead. Merchandising purchase budget shows the amount of goods to be purchased from its suppliers during the period. The merchandising purchase budget has the same basic format as the production budget, as shown below:
Example:
Inventory Purchase Budget for Merchandising Firms |
||
Budgeted cost of goods sold units or dollars |
xxxx |
|
Add desired ending merchandising inventory |
xxxx |
|
——– | ||
Total needs |
xxxx |
|
Less beginning merchandising inventory |
xxxx |
|
——— | ||
Required purchases units or dollars |
xxxx |
|
===== |
You may also be interested in other articles from “Budgeting and planning” chapter:
- Profit Planning
- Participative or Self Imposed budgeting
- Human Factors in Budgeting
- Zero Based Budgeting (ZBB)
- Budget Committee
- Master Budget
- Sales Budget
- Production Budget
- Inventory Purchases Budget for a Merchandising Firm
- Material Budgeting | Direct Materials Budget
- Labor Budget
- Manufacturing Overhead Budget
- Ending Finished Goods Inventory Budget
- Selling and Administrative Expense Budget
- Cash Budget
- Budgeted Income Statement
- Budgeted Balance Sheet
- International Aspects of Budgeting
Other Related Accounting Articles:
- Ending Finished Goods Inventory Budget
- Material Budgeting | Direct Materials Budget
- Selling and Administrative Expense Budget
- Manufacturing Overhead Budget
- Direct Labor Budget
- International Aspects of Budgeting
- Zero Based Budgeting (ZBB):
- Human Factors in Budgeting
- Participative Budgeting or Self Imposed Budgeting
- Profit Planning
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