A company budgets unit sales for the next two months below. The company wants each month's ending finished goods inventory in units to equal 60% of next month's sales. The company has 156 units in finished goods inventory on March 31. Budgeted sales units April 260 Prepare the production budget for April. Production Budget Budgeted sales units Ratio of inventory to future sales Budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Less: Beginning inventory units Units to produce May 270 April 260 162 60% 422 682 156
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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