Harden, Incorporated, has budgeted sales in units for the next five months as follows: June 7,200 units July 5,500 units August 7,300 units September 7,000 units October 5,100 units Past experience has shown that the ending inventory for each month should be equal to 20% of the next month's sales in units. The inventory on May 31 contained 1,440 units. The company needs to prepare a production budget for the next five months. The beginning inventory for September should be:
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.
Harden, Incorporated, has budgeted sales in units for the next five months as follows:
| June | 7,200 units |
|---|---|
| July | 5,500 units |
| August | 7,300 units |
| September | 7,000 units |
| October | 5,100 units |
Past experience has shown that the ending inventory for each month should be equal to 20% of the next month's sales in units. The inventory on May 31 contained 1,440 units. The company needs to prepare a production budget for the next five months.
The beginning inventory for September should be:
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