The data collected from the sales budget for the first five months of 2020 is given for a particular product of Al Salam Corporation. As below. Months January February March April May Sales Budget (Units) 11,300 14,700 16,700 18,400 13,200 Consider the following information: Each product requires two types of materials in following quantities. Material X: 4 Units and Material Y: 5 Units. Materials equal to one half of the next month’s production are to be in hand at the end of each month. This requirement was met on January, 2010. Prepare a budget showing quantities of each type of materials to be produced each month for the first quarter of 2010.
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.
(B) The data collected from the sales budget for the first five months of 2020 is given for a particular product of Al Salam Corporation. As below.
|
Months |
January |
February |
March |
April |
May |
|
Sales Budget (Units) |
11,300 |
14,700 |
16,700 |
18,400 |
13,200 |
Consider the following information:
- Each product requires two types of materials in following quantities. Material X: 4 Units and Material Y: 5 Units.
- Materials equal to one half of the next month’s production are to be in hand at the end of each month.
- This requirement was met on January, 2010. Prepare a budget showing quantities of each type of materials to be produced each month for the first quarter of 2010.
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