Required: Prepare a production budget by month and in total, for the second quarter.
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 8-2 (Algo) Production Budget [LO8-3]
Down Under Products, Limited, of Australia has budgeted sales of its popular boomerang for the next four months as follows:
April
May
June
July
Unit
Sales
82,000
90,000
122,000
96,000
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 15% of the following month's unit sales. The inventory at the end of March was 12,300 units.
Required:
Prepare a production budget by month and in total, for the second quarter.
Budgeted unit sales
Total needs
Required production in units
Down Under Products, Limited,
Production Budget
April
May
June
Quarter](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3db23a83-bbb0-4f29-aa75-2901db9315cc%2F6253e75b-b828-4d8c-849b-21c1879bf21c%2Fxofwebf_processed.jpeg&w=3840&q=75)
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