Tyler Co. predicts the following unit sales for the next four months: April, 3,000 units; May, 4,000 units; June, 6,000 units; and July, 2,000 units. The company’s policy is to maintain finished goods inventory equal to 30% of the next month’s sales. At the end of March, the company had 900 finished units on hand. Prepare a production budget for each of the months of April, May, and June.
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.
Tyler Co. predicts the following unit sales for the next four months: April, 3,000 units; May, 4,000 units;
June, 6,000 units; and July, 2,000 units. The company’s policy is to maintain finished goods inventory
equal to 30% of the next month’s sales. At the end of March, the company had 900 finished units on hand.
Prepare a production budget for each of the months of April, May, and June.
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