The Chen Corporation manufactures and sells two products: Thingone and Thingtwo. In July 2016, Chen's budget department gathered the following data to prepare budgets for 2017: 2017 Projected Sales Units Product Price $160 S758 Thingone Thingtwo 69,000 44,000 2017 Inventories in Units Expected Target January 1, 2017 Product December 31, 2017 Thingone Thingtwo 29,000 24,000 7,000 8,000 The following direct materials are used in the two products: Amount Used per Unit Direct Material Unit Thingone Thingtwo pound pound each Projected data for 2017 for direct materials are: Expected Inventories January 1, 2017 36,000 Ib. 31,000 Ib. 9,000 units Target Inventories December 31, 2017 Direct Material Anticipated Purchase Price $13 38,000 lb. 34,000 lb. 12,000 units Projected direct manufacturing labor requirements and rates for 2017 are: Product Hours per Unit Rate per Hour $13 Thingone Thingtwo 18 Manufacturing overhead is allocated at the rate of $24 per direct manufacturing labor-hour.
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.
Based on the preceding projections and budget requirements for Thingone and Thingtwo, prepare the following budgets for 2017:
* Revenues budget (in dollars)
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