Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May June July Unit Sales 58,000 75,000 98,000 84,000 The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of- month inventory levels must equal 15% of the following month's unit sales. The inventory at the end of March was 8,700 units. Required:
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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![Exercise 8-2 (Algo) Production Budget [LO8-3]
Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows:
Unit Sales
58,000
75,000
April
May
June
July
98,000
84,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-
month inventory levels must equal 15% of the following month's unit sales. The inventory at the end of March was 8,700 units.
Required:
Prepare a production budget by month and in total, for the second quarter.
Budgeted unit sales
Total needs
Required production in units
Down Under Products, Limited
Production Budget
April
May
June
Quarter](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8bc4f6a-99bf-411e-9b9f-cf84a2eda9c4%2Fe3eba74c-24a9-47dc-8d1d-cabb65ae0d84%2Fspwgs3b_processed.png&w=3840&q=75)
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