Ruiz Company provides the following budgeted sales for the next four months. The company wants to end each month with ending finished goods inventory equal to 30% of next month's budgeted unit sales. Finished goods inventory on April 1 is 165 units. Prepare a production budget for the months of April, May, and June. April May June July Budgeted sales units 550 630 580 670 RUIZ COMPANY Production Budget April Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Less: Beginning inventory units Units to produce 630 30% May 580 30% June 670 30%
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.
![Ruiz Company provides the following budgeted sales for the next four
months. The company wants to end each month with ending finished
goods inventory equal to 30% of next month's budgeted unit sales.
Finished goods inventory on April 1 is 165 units. Prepare a production
budget for the months of April, May, and June.
April May June July
Budgeted sales units 550 630 580 670
Budgeted sales units
Add: Desired ending inventory
Next period budgeted sales units
Ratio of inventory to future sales
Desired ending inventory units
Total required units
Less: Beginning inventory units
Units to produce
RUIZ COMPANY
Production Budget
April
630
30%
May
580
30%
June
670
30%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb92d4b66-19f7-4a80-a03b-036a0059c853%2F054dc05f-e33b-46eb-9b00-39f4eb7b77fe%2F683ufh9_processed.jpeg&w=3840&q=75)
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