Budgeted income statement and supporting budgets for three months Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year: a. Estimated sales at $125 per unit: January 25,000 units February 30,000 units March 45,000 units April 50,000 units b. Estimated finished goods inventories: January 1 2,000 units January 31 10% of next month’s sales February 28 10% of next month’s sales March 31 10% of next month’s sales c. Work in process inventories are estimated to be insignificant (zero). d. Estimated direct materials inventories: January 1 1,000 lbs. January 31 1,500 lbs. February 28 2,000 lbs. March 31 2,500 lbs.
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.
Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year:
a. Estimated sales at $125 per unit:
| January | 25,000 | units |
| February | 30,000 | units |
| March | 45,000 | units |
| April | 50,000 | units |
b. Estimated finished goods inventories:
| January 1 | 2,000 | units |
| January 31 | 10% | of next month’s sales |
| February 28 | 10% | of next month’s sales |
| March 31 | 10% | of next month’s sales |
c. Work in process inventories are estimated to be insignificant (zero).
d. Estimated direct materials inventories:
| January 1 | 1,000 | lbs. |
| January 31 | 1,500 | lbs. |
| February 28 | 2,000 | lbs. |
| March 31 | 2,500 |
lbs.
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