Champ Incorporated budgets the following sales in units for the coming two months. Each month’s ending inventory of finished units should be 60% of the next month’s sales. The April 30 finished goods inventory is 150 units. May June Budgeted sales units 250 290 Prepare the production budget for May. CHAMP, INCORPORATED Production Budget May Next period budgeted sales units 250 Budgeted sales units Add: Desired ending inventory Desired ending inventory units Total required units Less: Beginning inventory units
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.
Champ Incorporated budgets the following sales in units for the coming two months. Each month’s ending inventory of finished units should be 60% of the next month’s sales. The April 30 finished goods inventory is 150 units.
| May | June | |
|---|---|---|
| Budgeted sales units | 250 | 290 |
Prepare the production budget for May.
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