BUDGET 1 - DETERMINING YOUR SELLING PRICE & PRODUCT COST
In this Budget, you will determine your selling price (s) and your cost to purchase or produce each product you plan to sell. In other words, Budget 1 consists of Two Parts, namely,
Part 1 - Determine your Selling Price (s) Per Unit for each forecasted year; and
Part 2 - Determine your Total Product Cost (s) Per Unit for each forecasted year
Office Supplies Expense - from Operating Expense Budget
In July of 200X, Murray plans to purchase office supplies valued at $2,500. Therefore, his 200X Forecasted Cash Flow Statement will show a Cash Outflow of $2,500 in July for office supplies. Since Murray expects these supplies to be fully "used-up" or consumed by December 31, 200X (Murray's year end), his 200X Forecasted Income Statement will show an "Office Supplies Expense" of $2,500.
BUDGET 14 - DEVELOPING YOUR INCOME TAX RATE & BUDGET
Part 5 - Determine When Customers Will Pay You
Employer Costs - from Operating Expense Budget
Three Components of Murray's Sensitivity Analysis:
1. THE HEADING
Notice the "Heading" of the Sensitivity Analysis depicts the name of the company (Scholarship Information Services), the type of statement to follow (Sensitivity Analysis) and the date of the analysis (for the year ending December 31, 200X).
SCHOLARSHIP INFORMATION SERVICES
SENSITIVITY ANALYSIS
FOR YEAR ENDING DECEMBER 31, 200X
Printing of Checks Expense - from Operating Expense Budget
Murray visited his bank and asked one of the clerks "how much would it cost to purchase 250 business checks"? The clerk indicated that many styles exist, each having a different cost. Murray looked at the various samples of checks and selected a set that cost $75.00.
Income Taxes
The Income Tax a company pays is made up of state/provincial tax & federal tax. It is calculated by applying an Income Tax Rate or percentage (%) to a company's Earnings Before Taxes.
BUDGET 10 - DRAWINGS AND DIVIDENDS BUDGET
Part 6 - Determine Your Forecasted Accounts Receivable