The company is preparing budget for the next year. The estimated sales are as follows: Month 1 Month2 Month 4 Month 5 6000 units 7000 units 5500 units 6000 units 40% of each month’s sales should be produced in the month of the sale and the rest should be produced in the previous month. 50% of the direct materials required for each month’s production will be purchased in the previous month and the balance in the month of production. The cost of material per unit is $5. Calculate: The production budget in units for Month 1 Material cost budget for Month 2 Please avoid solutions image based thnku
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.
The company is preparing budget for the next year. The estimated sales are as follows:
Month 1 Month2 Month 4 Month 5
6000 units 7000 units 5500 units 6000 units
40% of each month’s sales should be produced in the month of the sale and the rest should be produced in the previous month.
50% of the direct materials required for each month’s production will be purchased in the previous month and the balance in the month of production. The cost of material per unit is $5.
Calculate:
The production budget in units for Month 1
Material cost budget for Month 2
Please avoid solutions image based thnku
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