Kipp Industries has the following production budget for 2022: 2022 Quarter 1 3,000 Units 2022 Quarter 2 8,000 Units 2022 Quarter 3 5,000 Units 2022 Quarter 4 6,000 Units 2023 Quarter 1 5,000 Units Each unit requires 4 pounds of materials costing $6 per pound. At the beginning of 2022 the Raw Materials inventory was 1,200 pounds. Management desires to have ending Raw Materials Inventory at the end of each quarter of 10% of the following quarter's materials needs. Prepare a Direct Materials Budget for each of the quarters of 2022 (No need to compute total for the year).
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.
- Kipp Industries has the following production budget for 2022:
|
2022 |
Quarter 1 |
3,000 |
Units |
|
|
2022 |
Quarter 2 |
8,000 |
Units |
|
|
2022 |
Quarter 3 |
5,000 |
Units |
|
|
2022 |
Quarter 4 |
6,000 |
Units |
|
|
2023 |
Quarter 1 |
5,000 |
Units |
Each unit requires 4 pounds of materials costing $6 per pound. At the beginning of 2022 the Raw Materials inventory was 1,200 pounds. Management desires to have ending Raw Materials Inventory at the end of each quarter of 10% of the following quarter's materials needs.
Prepare a Direct Materials Budget for each of the quarters of 2022 (No need to compute total for the year).
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