Mate Boomerang Corporation manufactures and sells plastic boomerangs. Expected boomerang sales (in units) for the upcoming months are as follows: July Aug. Sept. Oct. Nov. Dec. Expected unit sales ......... 12,000 15,000 10,000 8,000 7,000 11,000 Seven ounces of plastic resin are needed to produce every boomerang. Mate likes to have enough plastic resin on hand at the end of the month to cover 25% of the next month's production requirements. Mate also likes to maintain a finished goods inventory equal to 10% of the next month's estimated sales. Required: How many ounces of plastic resin should Mate plan on purchasing during the month of October?
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.
Mate Boomerang Corporation manufactures and sells plastic boomerangs. Expected
boomerang sales (in units) for the upcoming months are as follows:
July Aug. Sept. Oct. Nov. Dec.
Expected unit sales ......... 12,000 15,000 10,000 8,000 7,000 11,000
Seven ounces of plastic resin are needed to produce every boomerang. Mate likes to
have enough plastic resin on hand at the end of the month to cover 25% of the next
month's production requirements. Mate also likes to maintain a finished goods inventory equal to 10% of the next month's estimated sales.
Required:
How many ounces of plastic resin should Mate plan on purchasing during the month of October?
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