Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory Finished goods (units) 26,000 76,000 Raw material (grams) 56,000 46,000 Each unit of finished goods requires 2 grams of raw material. The company plans to sell 730,000 units during the year. The number of units the company would have to manufacture during the year would be: 730,000 units 806,000 units 674,000 units 780,000 units
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.
Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.
| Beginning Inventory | Ending Inventory | |
|---|---|---|
| Finished goods (units) | 26,000 | 76,000 |
| Raw material (grams) | 56,000 | 46,000 |
Each unit of finished goods requires 2 grams of raw material. The company plans to sell 730,000 units during the year.
The number of units the company would have to manufacture during the year would be:
-
730,000 units
-
806,000 units
-
674,000 units
-
780,000 units
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