Miles Manufacturing has prepared the following sales budget for the first four months of the year: SALES: January - 20,000 February - 22,000 March - 25,000 April - 21,000 Miles estimates that it will begin the year with 3,000 units in inventory. The company wants to end each month with inventory equal to 25% of the next month's projected sales. Prepare a production budget for each month: January, February and March.
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.
Miles Manufacturing has prepared the following sales budget for the first four months of the year:
SALES:
January - 20,000
February - 22,000
March - 25,000
April - 21,000
Miles estimates that it will begin the year with 3,000 units in inventory. The company wants to end each month with inventory equal to 25% of the next month's projected sales. Prepare a production budget for each month: January, February and March. Show your work!
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