Exercise 3 (Materials Purchase Budget) Mini Products, Inc., has developed a very powerful electronic calculator. Each calculator requires three small "chips" that cost P200 each and are purchased from an overseas supplier. Mini Products has prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3, as shown below. Year 2 Year 3 First Second Third Fourth First Budgeted. production calculators in 60,000 90,000 150,000 100,000 80,000 The chip used in production of the calculator is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stockouts. For this reason, the inventory of chips at the end of the quarter must be equal to 20% of the following quarter's production needs. Some 36,000 chips will be on hand to start the first quarter of Year 2. Required: Prepare a material purchases budget for chips, by quarter and in total, for Year 2. At the bottom of your budget, show the peso amount of purchases for each quarter and for the year in total.
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.
![Exercise 3 (Materials Purchase Budget)
Mini Products, Inc., has developed a very powerful electronic calculator. Each
calculator requires three small "chips" that cost P200 each and are purchased
from an overseas supplier. Mini Products has prepared a production budget
for the calculator by quarters for Year 2 and for the first quarter of Year 3, as
shown below.
Year 2
Year 3
First
Second
Third
Fourth
First
Budgeted.
production
calculators
in
60,000
90,000
150,000
100,000
80,000
The chip used in production of the calculator is sometimes hard to get, so it is
necessary to carry large inventories as a precaution against stockouts. For this
reason, the inventory of chips at the end of the quarter must be equal to 20%
of the following quarter's production needs. Some 36,000 chips will be on
hand to start the first quarter of Year 2.
Required:
Prepare a material purchases budget for chips, by quarter and in total, for Year
2. At the bottom of your budget, show the peso amount of purchases for each
quarter and for the year in total.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F406e5190-c133-4ebb-821b-6fb79323de64%2F83365627-f9f0-418a-ab5e-67d10329653f%2Fhddh0b_processed.jpeg&w=3840&q=75)
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