Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs: Direct materials $1.65 Direct labor 0.45 Variable overhead 0.70 Fixed overhead 1.80 Total unit cost $4.60 For the coming year, Play-Disc expects to make 400,000 plastic discs, and to sell 390,000 of them. Budgeted beginning inventory in units is 20,000 with unit cost of $4.60. (There are no beginning or ending inventories of work in process.)
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.
3.1
Cost of Goods Sold Budget
Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following
| Direct materials | $1.65 |
| Direct labor | 0.45 |
| Variable |
0.70 |
| Fixed overhead | 1.80 |
| Total unit cost | $4.60 |
For the coming year, Play-Disc expects to make 400,000 plastic discs, and to sell 390,000 of them. Budgeted beginning inventory in units is 20,000 with unit cost of $4.60. (There are no beginning or ending inventories of work in process.)
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