Matthew is learning the ropes in his new position, looking over the production department’s budgets from the past two years. He notices that his production department requires information from the sales division; in turn, the production budget is sent on to other departments. He now sees how the budget pieces fit together and how the production area contributes to the bigger picture. After seeing these connections, he gathers the following information. January February March April Budgeted sales volume (units) 2,800 2,600 4,200 3,600 Additional information: ● Budgeted selling price is $30 per unit. ● Desired monthly ending inventory is 15% of the next month’s sales. ● Beginning finished goods inventory on January 1 is 360 units.
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.
Matthew is learning the ropes in his new position, looking over the production department’s budgets from the past two years. He notices that his production department requires information from the sales division; in turn, the production budget is sent on to other departments. He now sees how the budget pieces fit together and how the production area contributes to the bigger picture. After seeing these connections, he gathers the following information.
|
January
|
February
|
March
|
April
|
|||||
|---|---|---|---|---|---|---|---|---|
|
Budgeted sales volume (units)
|
2,800 | 2,600 | 4,200 | 3,600 |
Additional information:
| ● | Budgeted selling price is $30 per unit. | |
| ● | Desired monthly ending inventory is 15% of the next month’s sales. | |
| ● | Beginning finished goods inventory on January 1 is 360 units. |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
