ABC Corporation has estimated the following information for first quarter of 2020 for one of its products: January February March Units to be produced 128,000 140,000 152,000 Desired ending inventory of finished goods 30,000 36,000 38,000 The ending inventory at December 2019 was 28,000 units. Required: Prepare the Production Budget and the Sales Budget for the first quarter of 2020, assuming selling price per unit is $20.
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 Corporation has estimated the following information for first quarter of 2020 for one of its products:
|
|
January |
February |
March |
|
|
Units to be produced |
128,000 |
140,000 |
152,000 |
|
|
Desired ending inventory of finished goods |
30,000 |
36,000 |
38,000 |
|
The ending inventory at December 2019 was 28,000 units.
Required:
Prepare the Production Budget and the Sales Budget for the first quarter of 2020, assuming selling price per unit is $20.
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