Average raw material in stock is for one month. Average material in work in progress is for half month. Credit allowed by suppliers is one month. Debtors are allowed credit of one month. Average time lag in payment of wages is 1 month. Average time lag in payment of overheads is 1 month, 25 percent of the sales are on credit basis. Cash balance is expected to be Rs. 1,00,000
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.
Average raw material in stock is for one month. Average material in work in progress is for half month. Credit allowed by suppliers is one month. Debtors are allowed credit of one month. Average time lag in payment of wages is 1 month. Average time lag in payment of overheads is 1 month, 25 percent of the sales are on credit basis. Cash balance is expected to be Rs. 1,00,000. Finished goods lie in the warehouse for one month. Production is carried on evenly throughout the year and wages and overhead accrue similarly. Debtors are to be valued at cost of sales.
Prepare a statement of
|
Particulars |
Cost per unit Rs. |
|
Raw material |
40 |
|
Direct labour |
20 |
|
Overhead |
30 |
|
Total cost |
90 |
|
Profit |
10 |
|
Selling price |
100 |
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