Capital Candy Company sells boxes of assorted candies, which it purchases from its suppliers for $4.50 per unit. Sales vary throughout the year, but to ensure it always has stock on hand, it has a policy of requiring an ending inventory for any period to be large enough to cover 20% of the next period's demand. Budgeted sales (in units) for the year ended December 31, 20X1 are as follows: Q1 - 13,600 Q2 - 6,700 Q3 -15,200 Q4 - 17,800 Assuming that inventory on hand at the beginning of each period matches that planned for in the policy above, what would be the cost of purchases for Q3 ?
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.
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