Prepare the direct materials purchases budget for the first three months of the coming year. Budgeted production Standard pounds per unit Total DM required (lbs.) Beginning inventorv Beginning inventorv Budgeted ending inventorv Production needs V January 4 February 4 March 4 TOE
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.
![Crane Auto has developed the following production plan for its new auto part.
Budgeted production (units)
Budgeted production
Standard pounds per unit
Total DM required (lbs.)
Beginning inventorv
Beginning inventorv
Each unit contains 4 pounds of raw material. The desired raw materials ending inventory is 20% of the next month's production needs,
plus an additional 100 pounds. December's ending inventory meets this requirement.
Prepare the direct materials purchases budget for the first three months of the coming year.
Budgeted ending inventory
January
Production needs
10,000
February
7,000
January
March April
4
13,000 14,000
February
4
March
10
DOOD
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