Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.
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.
![EXERCISE 9–2 Production Budget [LO3]
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next
four months as follows:
Sales
in Units
April
May
50,000
75,000
90,000
June
July..
80,000
The company is now in the process of preparing a production budget for the second quarter. Past
experience has shown that end-of-month inventory levels must equal 10% of the following month's
sales. The inventory at the end of March was 5,000 units.
Required:
Prepare a production budget for the second quarter; in your budget, show the number of units to be
produced each month and for the quarter in total.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5bb8af51-2647-4354-ada1-4ce9e8324340%2F53db5e22-2642-4d15-a363-e627cfce241e%2Fjth1t7f_processed.jpeg&w=3840&q=75)
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