Vineyard corporation, a manufacturer of fine wines, began the year with 20,000 bottles in inventory. The company estimated the budgeted slaes for the the 4th quarters of of the current year to be 200,000 bottles, 150,000 bottles, 250,000 bottles, and 400,000 bottles. The management feels that an ending inventory of 10% of subsequent quarter's sales is appropriate. What are the production needs for the 1st quarter? My teacher says it is budgeted sales of 200,000 + 15,000 ending inventory-20,000 beginning inventory=195,000 The part I don't understand is how did he get 15,000 as ending inventory? Help.
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.
Vineyard corporation, a manufacturer of fine wines, began the year with 20,000 bottles in inventory. The company estimated the budgeted slaes for the the 4th quarters of of the current year to be 200,000 bottles, 150,000 bottles, 250,000 bottles, and 400,000 bottles. The management feels that an ending inventory of 10% of subsequent quarter's sales is appropriate.
What are the production needs for the 1st quarter?
My teacher says it is
budgeted sales of 200,000 + 15,000 ending inventory-20,000 beginning inventory=195,000
The part I don't understand is how did he get 15,000 as ending inventory? Help.
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