Inventory of finished goods on June 30, 2010, is budgeted at 1,000 units. Management would like the desired quantity of finished goods inventory at the end of each month equal to 20 percent of next month’s budgeted sales. October’s projected sales are 12,000 units. Each completed unit of finished product requires 3 square feet of cedar at a cost of P15 per square foot. The company has determined that it needs 10 percent of next month’s raw material needs on hand at the end of each month. The cost of the direct material that should be purchased in August is: A.P329,400 B.P306,000 C.P214,800 D.P322,200 2. Montalbo’s Company’s sales budget shows the following expected sales for the following year: Quarter Units First 120,000 Second 160,000 Third 90,000 Fourth 110,000 Total 480,000 The inventory on December 31 of the prior year was budgeted at 36,000 units. The quantity of finished goods inventory at the end of each quarter is to equal 30% of the next quarter’s budgeted unit sales. How many units should be produced during the first quarter? 48,000
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.
2. Montalbo’s Company’s sales budget shows the following expected sales for the following year:
|
Quarter |
Units |
|
First |
120,000 |
|
Second |
160,000 |
|
Third |
90,000 |
|
Fourth |
110,000 |
|
Total |
480,000 |
The inventory on December 31 of the prior year was budgeted at 36,000 units. The quantity of finished goods inventory at the end of each quarter is to equal 30% of the next quarter’s budgeted unit sales.
How many units should be produced during the first quarter?
- 48,000
- 96,000
- 132,000
- 144,000
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
