Windsor Company is preparing its master budget for 2022. Relevant data pertaining to its sales, production, and direct materials budgets are as follows. Soles: Sales for the year are expected to total 1,200,000 units. Quarterly sales are 25%, 25%, 25%, and 25%, respectively. The sales price is expected to be $41 per unit for the first three quarters and $44 per unit beginning in the fourth quarter Sales in the first Quarter of 2023 are expected to be 10% higher than the budgeted sales for the first quarter of 2022 Production: Management desires to maintain the ending finished goods inventories at 20% of the next quarter's budgeted sales volume Direct materials Each unit requires 2 kg of raw materials at a cost of $10 per kilogram. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2023 are 410.000 kg. (a1) Prepare the sales budget by quarters for 2022.
Windsor Company is preparing its master budget for 2022. Relevant data pertaining to its sales, production, and direct materials budgets are as follows. Soles: Sales for the year are expected to total 1,200,000 units. Quarterly sales are 25%, 25%, 25%, and 25%, respectively. The sales price is expected to be $41 per unit for the first three quarters and $44 per unit beginning in the fourth quarter Sales in the first Quarter of 2023 are expected to be 10% higher than the budgeted sales for the first quarter of 2022 Production: Management desires to maintain the ending finished goods inventories at 20% of the next quarter's budgeted sales volume Direct materials Each unit requires 2 kg of raw materials at a cost of $10 per kilogram. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2023 are 410.000 kg. (a1) Prepare the sales budget by quarters for 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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Transcribed Image Text:Windsor Company is preparing its master
budget for 2022. Relevant data pertaining
to its sales, production, and direct materials
budgets are as follows.
Soles: Sales for the year are expected to
total 1,200,000 units. Quarterly sales are
25%, 25%, 25%, and 25%, respectively. The
sales price is expected to be $41 per unit
for the first three quarters and $44 per unit
beginning in the fourth quarter Sales in the
first Quarter of 2023 are expected to be
10% higher than the budgeted sales for the
first quarter of 2022
Production: Management desires to
maintain the ending finished goods
inventories at 20% of the next quarter's
budgeted sales volume
Direct materials Each unit requires 2 kg of
raw materials at a cost of $10 per kilogram.
Management desires to maintain raw
materials inventories at 10% of the next
quarter's production requirements. Assume
the production requirements for the first
quarter of 2023 are 410.000 kg.
(al)
Prepare the sales budget by quarters for
2022.
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