BUDGET 3 - DEVELOPING YOUR PURCHASE BUDGET
After the Sales Budget has been developed, the next step is to "Develop Your Purchase Budget". The Purchase Budget determines the number of units or products you will need to purchase each month, how much these purchases will cost you each month, when these purchase will be paid, and how much you will owe your supplier at the end of each forecasted business year (IE year end).
Long-term Liabilities
Murray Wilson's 200Y Forecasted Cash Flow Statement:
Message Center Expense - from Operating Expense Budget
Murray plans to use the services of a message center (often referred to as a call center). Moreover, when customers see Murray's advertisement, they will be prompted to call a 1-800 number for additional product information. All "customer calls" will be received by the message center. Moreover, the purpose of the message center is to sell callers Murray's product.
Newspaper Advertising Expense - from Operating Expense Budget
PART 2 - The Ending Inventory Budget for a Manufacturer
The following formula is used to develop a Manufacturer's Ending Inventory Budget.
BUDGET 6 - DEVELOPING YOUR ENDING INVENTORY BUDGET
After the Purchase Budget, the Direct Manufacturing Labor Budget, and the Manufacturing Factory Overhead Budget have been Developed, the next step is to "Develop Your Ending Inventory Budget".
Creating the Notes to Your Forecasted Financial Statements:
After completing your Financial Budgets (step 1) and all your Forecasted Statements & Analysis (steps 2 through step 7) for each forecasted business year, your final step involves creating Notes to the Forecasted Financial Statements.
BUDGET 13 - DEVELOPING YOUR INTEREST EXPENSE BUDGET
CREATING YOUR FORECASTED CASH FLOW STATEMENTS
After you complete the fourteen (14) Financial Budgets (STEP 1), the next step in the forecasting process is to create your First Year "Forecasted Cash Flow Statement".