ls in the month of purchase, 25% of a month's purchase of direct materials is paid in the month after purchase, and the final 10% is paid in the second month after the month of purchase. Calculate Kasson Company's budgeted accounts payable at September 30.
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.
kasson Company has budgeted units to be produced for the next five months as follows:
budgeted units to be produced
June 12,000
July 15,000
August 11,000
September 18,000
October 22,000
Kasson Company used the following information in creating
its
- Ending direct materials inventory for each month should be
equal to 140% of the next month's production needs.
- Each unit produced requires 2.5 pounds of direct materials.
- Direct materials are purchased for $2.30 per pound.
Kasson Company pays for 65% of a month's purchase of direct
materials in the month of purchase, 25% of a month's purchase
of direct materials is paid in the month after purchase, and
the final 10% is paid in the second month after the month of
purchase.
Calculate Kasson Company's budgeted accounts payable at
September 30.
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