Kequired ImomatioIn • Selling price per unit $ 7 per unit • Accounts receivable, beginning balance 65,000 • Sales collected in the quarter sales are made 75% • Sales collected in the quarter after sales are made 25% • Desired ending finished goods inventory is 30% of the budgeted unit sales of the next quarter • Finished goods inventory, beginning 12,000 units Raw materials required to produce one unit 5 pounds • Desired ending inventory of raw materials is • Raw materials inventory, beginning 10% of the next quarter's production needs 23,000 pounds • Raw material costs 0.80 per pound • Raw materials purchases are paid 60% in the quarter the purchases are made and 40% in the quarter following purchase • Accounts payable for raw materials, beginning balance 2$ 81,500
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.
D. What are the total expected cash disbursements for raw materials for the year under this revised budget?
e. After seeing this revised budget the production manager cautioned that due to the current production constraint a complex milling machine the plant can produce no more than 90000 units in any one quarter. Is this a potential problem ?
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