Breaded Oak, Inc. has a policy that requires 20 percent of the expected sales of its product to be on hand at the end of the prior month. Forecasted sales, in units, for the months of January through April are as follows: January 36,000 units February 42,000 units March 58,000 units April 52,000 units a) Calculate the number of units planned for ending inventory for January, February, and March. b) Calculate the number of units budgeted to be produced in January, February, and March.
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.
Breaded Oak, Inc. has a policy that requires 20 percent of the expected sales of its product to be on hand at the end of the prior month.
January 36,000 units
February 42,000 units
March 58,000 units
April 52,000 units
a) Calculate the number of units planned for ending inventory for January, February, and
March.
b) Calculate the number of units budgeted to be produced in January, February, and
March.
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