The following information applies to questions 25 and 26 The sales budget for Fred Limited contains the following information: October November December Units 300 550 700 $ (thousands) 75,000 165,000 210,000 Sales are all on credit, with 30% collected in the month of sale and 70% in the following month. Finished goods inventory at the end of each month should be 58% of the following month's sales requirements. Prepare a finished goods inventory budget and use it to answer Following Calculate the closing finished goods inventory, in units, for October. Calculate the required production, in units, for October.
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 following information applies to questions 25 and 26
The sales budget for Fred Limited contains the following information:
|
October |
November |
December |
|
|
Units |
300 |
550 |
700 |
|
$ (thousands) |
75,000 |
165,000 |
210,000 |
Sales are all on credit, with 30% collected in the month of sale and 70% in the following month. Finished goods inventory at the end of each month should be 58% of the following month's sales requirements.
Prepare a finished goods inventory budget and use it to answer Following
Calculate the closing finished goods inventory, in units, for October.
Calculate the required production, in units, for October.
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