MW Limited manufactures a single product, a Tu. The finance director prepares monthly budgets. The following budgeted information is available for the first three months of 2015. The selling price will be fixed at Rs.60 per unit. In January 2015 sales are expected to be 24 000 units. It is anticipated that there will be a 5% increase in sales volume in every subsequent month up to April 2015. The finished goods inventory level at the end of each month will be maintained at one-third of the expected sales volume in the following month. The inventory
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.
MW Limited manufactures a single product, a Tu. The finance director prepares
monthly budgets. The following budgeted information is available for the first three
months of 2015.
- The selling price will be fixed at Rs.60 per unit. In January 2015 sales are expected to be 24 000 units. It is anticipated that there will be a 5% increase in sales volume in every subsequent month up to April 2015.
- The finished goods inventory level at the end of each month will be maintained at one-third of the expected sales volume in the following month. The inventory of finished goods at 31 December 2014 is expected to be 7500 units with a value of Rs.242000. The finished goods inventory value at 31 March 2015 is expected to be Rs.298000.
- Each unit of Tu requires 10 kilos of raw material. The closing inventory of raw materials each month is expected to meet 20% of the production requirement of the following month. The inventory of raw materials at 31 December 2014 is expected to be 48000 kilos. The purchase price will remain at Rs.1.50 per kilo.
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Note: No need to enter currency symbol and comma just type numbers with nearest round off (for example: 10000 or 10000.65=10001) |
G: Calculate the Closing Finished good for the month of January 2015
H: Calculate the Closing Finished good for the month of February 2015
I: Calculate the Closing Finished good for the month of March 2015
J: Calculate the Production budget for the month of January 2015
K: Calculate the Production budget for the month of February 2015
L: Calculate the Production budget for the month of March 2015
M: Calculate the Closing Raw Material for the month of January 2015
N: Calculate the Closing Raw Material for the month of February 2015
O: Calculate the Closing Raw Material for the month of March 2015
P: Calculate the Purchase budget for the month of January 2015
Q: Calculate the Purchase budget for the month of February 2015
R: Calculate the Purchase budget for the month of March 2015
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