Prepare a production budget for the Bath and Gym scales for the month ended March 31.
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.
Healthy Measures Inc. produces a Bath and Gym version of its popular electronic scale. The anticipated unit sales for the scales by sales region are as follows:
| Bath Scale | Gym Scale | |||
| Northern Region unit sales | 26,100 | 39,200 | ||
| Southern Region unit sales | 28,200 | 29,600 | ||
| Total | 54,300 | 68,800 |
The finished goods inventory estimated for March 1, for the Bath and Gym scale models is 1,700 and 2,700 units, respectively. The desired finished goods inventory for March 31 for the Bath and Gym scale models is 1,200 and 2,900 units, respectively.
Prepare a production budget for the Bath and Gym scales for the month ended March 31. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Healthy Measures Inc.Production BudgetFor the Month Ending March 31
| Units Bath Scale | Units Gym Scale | |
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Expected units to be sold | Expected units to be sold |
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Desired inventory, March 31 | Desired inventory, March 31 |
| Total units available | fill in the blank 7 | fill in the blank 8 |
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Estimated inventory, March 1 | Estimated inventory, March 1 |
| Total units to be produced | fill in the blank 12 | fill in the blank 13 |
A production budget is prepared to ascertain the units of various products to be produced in a given month so that the sales and inventory requirements are fulfiled.
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