Joe produces tuna in cans. The sales budget for the first four months of the year is presented below. Unit Sales Dollar Sales January 200,000 $150,000 February 240,000 180,000 March 220,000 165,000 April 200,000 150,000 Company policy requires that ending inventories for each month be 25 percent of next month’s sales. At the beginning of January, the inventory of tuna is 38,000 cans. Required Prepare a production budget for the first quarter of the year. Show the number of cans that should be produced each month as well as for the quarter 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.
Joe produces tuna in cans. The sales budget for the first four months of the year is presented below.
Unit Sales Dollar Sales
January 200,000 $150,000
February 240,000 180,000
March 220,000 165,000
April 200,000 150,000
Company policy requires that ending inventories for each month be 25 percent of next month’s sales. At the beginning of January, the inventory of tuna is 38,000 cans.
Required
Prepare a production budget for the first quarter of the year. Show the number of cans that should be produced each month as well as for the quarter in total.
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