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Need help with an Accounting case on seven budget


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Your finished  case will consist of six or seven budgets (a sales budget, a production budget in units, a purchases budget, a budgeted income statement, a contribution margin income statement, a cash budget, and, if necessary, a capital expenditure budget.) 

You will also have four or five narrative reports (a sales budget report, a purchases budget report, an income statement report, a cash budget report, and an explanation of your capital budget, if necessary).

Narrative reports are reports that are in the form or a white paper that clearly explains the numeric entries on your budgets.  The length of the narrative reports will depend on the particular report.  In general, you should be able to prepare the sales budget report on one or two pages, the purchases budget report on one or two pages, the income statement report on one page, and the cash budget report on one page.  In this case, the capital budget report would be less than one page.  You should not worry if one of your reports is more or less than the recommendation given here—just be sure you cover all of the important points and satisfactorily explain the numeric entries in your budget.  Also, be sure you explain the process of “how” your numbers were determined.  In this regard, it is not necessary or desirable to explain the exact calculations.  Consider your audience and prepare a report that would be suitable for executives making plans and decisions for the upcoming year.   

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