Eli’s Cheesecake Master Budget

Eli’s Cheesecake is a food manufacturing company located in Chicago, Illinois (Eli’s Cheesecake Company, 2011). Like all companies Eli’s has to prepare various annual budgets that are needed to combine into the master budget. These budgets are sales, purchases, operating expenses, capital, and cash budgets. Some of the above mentioned budgets for Eli’s may need to be done before others because some of the information from one budget is necessary for completing the others. I will describe some items that we would expect to see on these individual budgets.

The sales budget is the first budget that Eli’s needs to prepare for the master budget. The sales budget is a detailed report that shows the sales in units that is expected in future periods (Hilton, Maher & Selton, 2008). The sales budget is helpful in improving the profitability of a company like Eli’s.

The items we would find on a sales budget at Eli’s are:

• The expected sales in units per quarter

• Expected price per unit per quarter

(Hilton, Maher & Selton, 2008).

The purchases budget helps a manufacturing company project the amount of goods that Eli’s will purchase for a specific budget period. The purchases budget provides Eli’s with the quantity of goods they need in order to reach their monetary objectives (Lynn, 2011). The purchases budget provides Eli’s with the cost of inventory in current and future inventory levels.

Some items we would find on the purchases budget at Eli’s are:

• Sales

• Desired ending merchandise inventory

• Beginning merchandise inventory.

(Lynn, 2011)

The operating expenses budget forecasts all of fixed and variable operating expenses for Eli’s Cheesecake (Venture Line, 2011).

The items we would expect to see on the operating expenses budget at Eli’s would be:

• Sales

• Variable costs such as raw material

• Salaries

• Rent

• Depreciation

• Interest

• Depreciation to be written off

(Venture Line, 2011)

The capital budget is when a business such as Eli’s needs to determine if projects such as building a new plant or investing in a long term project