Run Ltd are a fitness shoe manufacturer based in Ballymount. Run Ltd are preparing their budgets for the next financial year ending 30 June 2022. They have prepared the following sales budget: Quarter 1 2 3 4 (July – Sept 21). (Oct - Dec 21) (Jan - March 22) (April – June 22) Sales (units) Selling price per unit 26,500 22,000 20,000 28,500 €95 €95 €95 €95 All sales are on a cash basis. Run Ltd maintains a very strict inventory policy, whereby it plans to maintain closing inventory of finished goods of 25% of the next quarters sales demand. Sales Demand in Quarter 1 and 2 2023 is expected to be 20% higher than Quarter 1 and 2 2022.
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.
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