Part #1: At the beginning of October, L Company had 1,600 finished goods units. Budgeted sales for October, November, December, and January are 8,400 units and 10,200 units and 13,600 units and 7,400 units respectively. L Company wants to have sufficient units on hand at the end of each month to meet 20 percent of the following month’s budgeted sales. Prepare a Production Budget with columns for October, November, December and Total 4th Quarter.
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.
Part #1: At the beginning of October, L Company had 1,600 finished goods units. Budgeted sales
for October, November, December, and January are 8,400 units and 10,200 units and 13,600 units
and 7,400 units respectively. L Company wants to have sufficient units on hand at the end of each
month to meet 20 percent of the following month’s budgeted sales. Prepare a Production Budget
with columns for October, November, December and Total 4th Quarter.
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