Ch 22-Budgeting Problem A company has the following data to prepare the budgets for 2022: • Budgeted Sales units: 1st Qtr 6,000; 2nd Qtr 6,500; 3rd Qtr 7,000 • Desired Ending Finished Goods Inventory: 25% of next Qtr Sales • Desired Ending Raw Material Inventory: 35% of next Qtr Production • Beginning Inventory Balances for Production and Material follow the same percentage relationships • Each unit requires 3 pounds of material, at $4 per pound Answer the following questions based on the data above in developing Production and Direct Material budgets: 3. Compute the total pounds of Direct Material Purchases for Qtr 1 4. Compute the total cost of Direct Material Purchases for Qtr 1
Ch 22-Budgeting Problem A company has the following data to prepare the budgets for 2022: • Budgeted Sales units: 1st Qtr 6,000; 2nd Qtr 6,500; 3rd Qtr 7,000 • Desired Ending Finished Goods Inventory: 25% of next Qtr Sales • Desired Ending Raw Material Inventory: 35% of next Qtr Production • Beginning Inventory Balances for Production and Material follow the same percentage relationships • Each unit requires 3 pounds of material, at $4 per pound Answer the following questions based on the data above in developing Production and Direct Material budgets: 3. Compute the total pounds of Direct Material Purchases for Qtr 1 4. Compute the total cost of Direct Material Purchases for Qtr 1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Ch 22-Budgeting Problem
A company has the following data to prepare the budgets for 2022:
• Budgeted Sales units: 1st Qtr 6,000; 2nd Qtr 6,500; 3rd Qtr 7,000
• Desired Ending Finished Goods Inventory: 25% of next Qtr Sales
Desired Ending Raw Material Inventory: 35% of next Qtr Production
•
Beginning Inventory Balances for Production and Material follow the same percentage
relationships
• Each unit requires 3 pounds of material, at $4 per pound
•
Answer the following questions based on the data above in developing Production and Direct
Material budgets:
3. Compute the total pounds of Direct Material Purchases for Qtr 1
4. Compute the total cost of Direct Material Purchases for Qtr 1
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