Each unit produced by Terra Electronics requires 4 pounds of raw materials. The raw materials inventory must be equal to 10% of the next month’s production. Each pound of raw materials costs $2.00. Budgeted production information follows. April 28,000 units May 30,000 units June 25,000 units How much are budgeted purchases of raw materials for May?
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.
- Each unit produced by Terra Electronics requires 4 pounds of raw materials. The raw materials inventory must be equal to 10% of the next month’s production. Each pound of raw materials costs $2.00. Budgeted production information follows.
April 28,000 units
May 30,000 units
June 25,000 units
How much are budgeted purchases of raw materials for May?
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