Atlantic Surf manufactures surfboards. The company’s budgeted sales units for the next three months is shown below. Company policy is to maintain finished goods inventory equal (in units) to 50% of the next month’s unit sales. As of June 30, the company has 1,950 finished surfboards in inventory. July August September Budgeted sales units 3,900 7,400 4,500 Prepare the production budget for the months of July and August.
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.
Atlantic Surf manufactures surfboards. The company’s budgeted sales units for the next three months is shown below. Company policy is to maintain finished goods inventory equal (in units) to 50% of the next month’s unit sales. As of June 30, the company has 1,950 finished surfboards in inventory.
| July | August | September | |
|---|---|---|---|
| Budgeted sales units | 3,900 | 7,400 | 4,500 |
Prepare the production budget for the months of July and August.
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