DeWitt Industries has adopted the following production budget for the first 4 months of 2020. Month Units Month Units January 10,470 March 5,440 February 8,470 April 4,340 Each unit requires 4 pounds of raw materials costing $4 per pound. On December 31, 2019, the ending raw materials invento was 8,376 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month production requirements. Prepare a direct materials purchases budget by month for the first quarter.
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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