Lydia Company manufactures a single product. It keeps its inventory of finished goods at twice the coming month’s budgeted sales and inventory of raw materials at 150% of the coming month’s budgeted production. Each unit of product requires five pounds of materials, which cost P3 per pound. The sales budget is, in units: May, 10,000; June, 12,400; July, 12,600; August, 13,200. 3. Compute budgeted material purchases for June in pounds and pesos.
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.
Lydia Company manufactures a single product. It keeps its inventory of finished goods
at twice the coming month’s budgeted sales and inventory of raw materials at 150%
of the coming month’s budgeted production. Each unit of product requires five pounds
of materials, which cost P3 per pound. The sales budget is, in units: May, 10,000;
June, 12,400; July, 12,600; August, 13,200.
3. Compute budgeted material purchases for June in pounds and pesos.
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