Prepare a schedule of cost of goods manufactured for Gourmet Bones for the year ended December 31 2018. Goirmet Bones manufactured 17,900 units of its product in 2018. Compare the company's unit product cost for the year, rounded to the nearest cent.
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.
Raw materials: It is the basic input required to manufacture the finished products. The raw materials are processed by incurring conversion costs and other overhead to convert them into finished products.
Manufacturing overhead: It is the indirect cost incurred as a part of manufacturing the products. These costs are not directly related to the units manufactured. So they are allocated to the manufactured units based on estimated cost drivers.
Work-in process: This is the cost of units which were semi-finished in a particular period. Further work should be done and cost should be incurred to make them into finished products.
Finished goods: These are the units which were completed by the manufacturing process and were ready to sale.
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