ABC Company has budgeted sales of its product over the next four months as follows: July 30,000 units September 60,000 units August 45,000 October 48,000 The company is now in the process of preparing a production budget for the third quarter. Experience has shown thate nd-of-month inventories of finished goods must equal 10% of next month’s sales. The inventory at the end of Junew as 4,000 units. How much is cost of goods manufactured in (1) September and for the (2) third quarter assuming cost to produce per unit is ₱2.75? Show your solution.
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.
ABC Company has budgeted sales of its product over the next four months as follows:
July
30,000 units
September
60,000 units
August
45,000
October
48,000
The company is now in the process of preparing a production budget for the third quarter. Experience has shown thate nd-of-month inventories of finished goods must equal 10% of next month’s sales. The inventory at the end of Junew as 4,000 units.
How much is cost of goods manufactured in (1) September and for the (2) third quarter assuming cost to produce
per unit is ₱2.75? Show your solution.
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