Blossom Company's sales budget projects unit sales of part 1987 of 10,700 units in January, 12,200 units in February, and 13,000 units in March. Each unit of part 1987 requires 3 pounds of materials, which cost $4 per pound. Blossom Company desires its ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2019. (a) Prepare a production budget for January and February 2020. 4: 7:1 BLOSSOM COMPANY Production Budget January February
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.
![Blossom Company's sales budget projects unit sales of part 1987 of 10,700 units in January, 12,200 units in February,
and 13,000 units in March. Each unit of part 1987 requires 3 pounds of materials, which cost $4 per pound. Blossom Company desires
its ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory
to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2019.
(a)
Prepare a production budget for January and February 2020.
BLOSSOM COMPANY
Production Budget
January
February
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