Rhett Company manufactures and sells dress shirts. Each shirt (unit) requires 4 yards of cloth. Selected data from Rhett's master budget for next quarter are shown below:AprilMayJuneBudgeted sales (in units)..................................................26,000 28,000 32,000Budgeted production (in units) ........................................28,000 32,000 36,000Desired ending inventory of cloth (in yards) ...................2,000 2,600 3,200How many yards of cloth should Rhett plan on purchasing in May
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.
Rhett Company manufactures and sells dress shirts. Each shirt (unit) requires 4 yards of cloth. Selected data from Rhett's
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