A company manufactures card tables. The company has a policy of maintaining a finished goods inventory equal to 40 percent of the next month's planned sales. Each card table requires 3 hours of labor. The budgeted labor rate for the coming year is P13 per hour. Planned sales for the months of April, May, and June are respectively 4,000; 5,000, and 3,000 units. The budgeted direct labor cost for June was P136,500. 1.What are budgeted sales for July? Budgeted sales for the first quarter of the year are shown below January February March 35.000 25.00 32.000 The company has a policy that requires the ending inventory in each period to be 10 percent of the following period's sales. 2.Assuming that the company follows this policy, what quantity of production should be scheduled for February?
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.
A company manufactures card tables. The company has a policy of maintaining a finished goods inventory equal to 40 percent of the next month's planned sales. Each card table requires 3 hours of labor. The budgeted labor rate for the coming year is P13 per hour. Planned sales for the months of April, May, and June are respectively 4,000; 5,000, and 3,000 units. The budgeted direct labor cost for June was P136,500.
1.What are budgeted sales for July?
Budgeted sales for the first quarter of the year are shown below
January February March
35.000 25.00 32.000
The company has a policy that requires the ending inventory in each period to be 10 percent of the following period's sales.
2.Assuming that the company follows this policy, what quantity of production should be scheduled for February?
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