| Course | ACC 349 Cost Accounting (ACC/349) |
|---|---|
| Week | 4 |
| Paper type | Budget and inventory control paper |
| Length | about 1,022 words, 4 double-spaced pages plus title page and references |
| Format | APA 7 student paper |
| School | University of Phoenix |
| Program | BS in Accounting |
| Updated | September 2026 |
Free sample paper for ACC 349 Week 4
Planning a Garden Center's Spring: Sales, Purchases and Cash Budgets for April Through June and an Order Quantity for Potting Soil
[Student Name]
University of Phoenix
ACC/349: Cost Accounting
Week 4 Assignment
[Instructor Name]
[Date]
The garden center and all figures are composites written for a model paper; budgeting methods and research findings come from the sources listed.
A composite independent garden center sells plants, trees, soil, mulch, tools and outdoor furniture from one location with a large greenhouse. About 70% of its customers are households; the rest are small landscaping contractors who buy on account. Sales in April, May and June make up nearly half of the year's revenue. To be ready, the center fills its greenhouse and yard in March, paying for much of that stock before customers arrive. For a seasonal business, the most dangerous month is not the slow one but the month just before the rush, when the shelves are full and the bank account is empty. This paper prepares the spring quarter budgets and an ordering policy for the center's best-selling bagged item.
Assumptions
Sales are forecast from last year's figures adjusted for a new contractor account and a planned price increase: $420,000 in April, $560,000 in May and $380,000 in June, with $180,000 in March and $210,000 expected in July. Cost of goods sold averages 55% of sales. The center wants each month's ending inventory to equal 40% of the next month's cost of goods sold. Seventy percent of sales are cash or card and are collected in the month of sale; 30% are contractor sales collected the following month. Half of each month's purchases are paid in the month and half the next. Cash spent on everything else, chiefly payroll, rent and utilities, comes to $110,000 in April, $135,000 in May and $100,000 in June. The center began April with $40,000 in cash and a $120,000 balance on its line of credit, drawn in March, which it plans to repay in May with $1,800 of interest.
Sales and Cost of Goods Sold
Cost of goods sold is $231,000 in April, $308,000 in May, $209,000 in June and $115,500 in July.
Merchandise Purchases Budget
In April, the center needs $231,000 of goods for sales plus a desired ending inventory of 40% of May's cost of goods sold, $123,200, a total of $354,200. Beginning inventory is $92,400, so April purchases are $261,800. In May, $308,000 plus ending inventory of $83,600 less beginning inventory of $123,200 gives purchases of $268,400. In June, $209,000 plus $46,200 less $83,600 gives $171,600. Garrison et al. (2021) describe this as the core of a merchandiser's master budget, since it links the sales forecast to both inventory and cash.
Cash Collections
April collections are 70% of April sales, $294,000, plus 30% of March sales, $54,000, a total of $348,000. May collections are $392,000 plus $126,000, or $518,000. June collections are $266,000 plus $168,000, or $434,000. At the end of June, $114,000 of contractor sales remains to be collected in July.
Cash Payments for Purchases
March purchases were $190,000. April payments are half of April purchases, $130,900, plus half of March purchases, $95,000, or $225,900. May payments are $134,200 plus $130,900, or $265,100. June payments are $85,800 plus $134,200, or $220,000.
The Cash Budget
April begins with $40,000. Adding collections of $348,000 and subtracting purchase payments of $225,900 and operating costs of $110,000 leaves $52,100. The center's bank requires a minimum balance of $40,000, so April is tight but workable.
May begins with $52,100. Collections of $518,000 less purchase payments of $265,100 and operating costs of $135,000 would leave $170,000. The center repays the $120,000 line of credit with $1,800 of interest, leaving $48,200.
June begins with $48,200. Collections of $434,000 less payments of $220,000 and operating costs of $100,000 leave $162,200, which the owner plans to hold toward the slow months of late summer and the next spring's stocking.
The budget shows that April, not March, is when the center is closest to its minimum, because contractor collections lag sales by a month while suppliers expect half their money right away.
Ordering Potting Soil
Bagged potting soil is the center's highest-volume item: about 12,000 bags a year. Placing an order, including the delivery charge and receiving time, costs about $60. Holding a bag for a year, including the money tied up, space and damaged bags, costs about $1.60. The economic order quantity is the square root of two times 12,000 times $60, divided by $1.60, which is the square root of 900,000, or about 950 bags. That order size balances ordering and holding costs, and the model traces back to Harris's early work on how many parts to make at once (Harris, 1990).
Demand is not steady, though. In peak weeks the center sells about 80 bags a day, and the supplier takes five days to deliver. A reorder point of 400 bags covers expected use during delivery; adding 150 bags of safety stock for busy weekends raises it to 550. In the off-season the center will order smaller amounts, since the formula assumes demand that the business does not have in winter. From November to February, soil sales fall to about 15 bags a day, and a 950-bag order would sit for two months, taking up covered storage the center needs for holiday trees.
Using the Budget With People
The owner plans to share the budget with the two department managers and hold them accountable for their sales and gross margin. Jensen (2001) warned that tying pay to budget targets encourages managers to lowball forecasts and game results, and Hansen et al. (2003) reviewed approaches that separate planning from performance evaluation for this reason. The center will ask managers to help set the forecasts, reward them on improvement over last year rather than on hitting the budget and update the forecast in mid-May if weather changes demand.
Conclusion
The spring budgets tie a sales forecast to inventory purchases, collections, payments and cash. They show that April is the month of greatest cash strain and that the line of credit can be repaid in May. A 950-bag order size and a 550-bag reorder point keep potting soil in stock through the rush without tying up more money than needed. The budget will be most useful if it is treated as a plan to adjust, not a target to defend.
References
Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2021). Managerial accounting (17th ed.). McGraw Hill.
Hansen, S. C., Otley, D. T., & Van der Stede, W. A. (2003). Practice developments in budgeting: An overview and research perspective. Journal of Management Accounting Research, 15(1), 95-116. https://doi.org/10.2308/jmar.2003.15.1.95
Harris, F. W. (1990). How many parts to make at once. Operations Research, 38(6), 947-950. https://doi.org/10.1287/opre.38.6.947
Jensen, M. C. (2001). Corporate budgeting is broken, let's fix it. Harvard Business Review, 79(10), 94-101.
What the ACC 349 Week 4 instructions ask
The ACC 349 Week 4 assignment generally asks students to prepare parts of a master budget and to explain inventory control. Typical tasks include a sales budget, a production or merchandise purchases budget, schedules of expected cash collections and disbursements and a cash budget showing borrowing and repayment. Some prompts add a budgeted income statement or balance sheet. The inventory portion often asks for an economic order quantity, a reorder point or a comparison of ordering policies, sometimes including just-in-time. Many sections also ask about behavioral issues such as participative budgeting or budgetary slack. Students should show every schedule clearly, explain the assumptions behind each figure and cite sources in APA style.
How this ACC 349 Week 4 example is built
A garden center makes budgeting meaningful because its sales swing sharply by month, so inventory must be bought ahead of demand and cash runs short before the season pays for itself. The paper states each assumption first, such as the share of sales on account and the target ending inventory, then builds the budgets in the order they depend on one another. Each schedule is written in prose with its figures so a reader can recompute it. The cash budget shows the line of credit repaid in May. The inventory section applies the economic order quantity to potting soil and sets a reorder point with safety stock, and a final section discusses how the budget will be used with staff.
ACC 349 Week 4 grading rubric: where the points go
The rubric for budgeting usually rewards schedules that are correct, internally consistent and linked in the right order. Faculty check that purchases reflect cost of sales plus desired ending inventory less beginning inventory, that collections and payments follow the stated patterns and that the cash budget carries each month's ending balance forward and handles financing correctly. Explanations of assumptions add credit, as does interpretation, for example identifying the month when cash is tightest. Inventory calculations must use consistent units and time periods. Discussion of behavioral issues, supported by sources, earns further marks. A readable layout and sound APA form earn the last points, while schedules that do not tie to each other lose the most points.
ACC 349 Week 4 help: mistakes to avoid
ACC 349 Week 4 budgets often fail because students calculate each schedule separately and the numbers never connect. Build in order: sales, then purchases, then collections and payments, then cash. Carry each month's ending inventory and ending cash into the next month. Another frequent error is treating all sales as cash when some are on account, or paying for purchases in the month bought when the terms say otherwise. For EOQ, keep annual demand and annual holding cost in the same units. Explain your assumptions rather than hiding them. Point out the month when cash is tightest. Finally, say something about how people will react to the budget, since that is part of control.
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ACC 349 Week 4 questions, answered
What does ACC/349 Week 4 usually ask for?
It usually asks for parts of a master budget, such as sales, purchases or production and cash budgets, plus inventory control calculations like economic order quantity and reorder point.
Where can I find a free ACC 349 Week 4 sample paper?
A garden center budget for April through June is on this page with each schedule worked and explained beside margin notes. Share your own case and we will prepare the first version for you free.
How is a merchandise purchases budget calculated?
Budgeted cost of goods sold plus desired ending inventory, minus beginning inventory, gives the purchases needed for the month.
What is the economic order quantity?
It is the order size that minimizes the combined annual cost of placing orders and holding inventory, found as the square root of two times annual demand times order cost, divided by holding cost per unit.
What is budgetary slack?
It is the cushion managers build into a budget by understating revenue or overstating costs, often because the budget will be used to judge their performance.
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