The following budgeted information is provided: Month 1 2 3 Sales in units 26,000 31,000 29,000 Production in units 27,000 33,000 26,000 One pound of materials is required for each finished unit. The inventory of materials at the end of each month should equal 25% of the following month's production needs. At the beginning of Month 1, there were 6,750 pounds of materials on hand. Purchases of raw materials for Month 1 would be (in pounds): Multiple Choice 36,000. 41,750. 28,500. 33,000.
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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