Alexa Products produces coat racks in Calgary, Canada. The accountant has presented you the following budgeted data for the second quarter of 2021. Sales are forecasted to be 80,000 units at a price per unit of $32. The budgeted beginning and ending finished goods inventories are 5,000 and 15,000 units respectively. It is estimated that each rack requires four kilograms of metal at a budgeted price of $4 per kg. The beginning raw materials inventory is estimated as 3,200 kilograms. Alexa Products wants to keep ending raw materials inventory of 5,400 due to fluctuations in demand. Each rack requires 1.5 hours of direct labour and the standard hourly pay rate is $20. Required: (please show all steps of your computation in proper format) 1. Prepare a sales budget for the second quarter of 2021. 2. Prepare a production budget for the second quarter of 2021. 3. Prepare a direct materials purchases
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.
Alexa Products produces coat racks in Calgary, Canada. The accountant has presented you the following budgeted data for the second quarter of 2021. Sales are
Required: (please show all steps of your computation in proper format)
1. Prepare a sales budget for the second quarter of 2021.
2. Prepare a production budget for the second quarter of 2021.
3. Prepare a direct materials purchases budget for the second quarter of 2021.
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