Exercise 7-3 (Algo) Manufacturing: Production budget LO P1 Ruiz Company provides the following budgeted sales for the next four months. The company wants to end each month with finished goods inventory equal to 20% of next month's budgeted unit sales. Finished goods inventory on April 1 is 122 units. production budget for the months of April, May, and June, Budgeted sales units Next period budgeted sales units Ratio of inventory to future sales Total required units April 610 Units to produce Hay 690 RUIZ COMPANY Production Budget April June 640 690 20% July 730 May 640 20% June 730 20%
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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