Electro Company budgets production of 540,000 electric panels in the second quarter and 610,000 electric panels in the third quarter. Each panel requires 0.80 pound of direct material at a cost of $1.60 per pound. The company desires to end each quarter with an ending inventory of this material equal to 20% of next quarter's budgeted materials requirements. Beginning inventory of this material is 86,400 pounds. Prepare a direct materials budget for the second 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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