Harbour Inc. budgeted production of 258,000 personal journals in 20Y6. Paper is required to produce a journal. Assume 5 square yards of paper are required for each journal. The estimated January 1, 20Y6, paper inventory is 25,100 square yards. The desired December 31, 20Y6, paper inventory is 17,000 square yards. If paper costs $0.60 per square yard, determine the direct materials purchases budget for 20Y6.
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.
Direct Materials Purchases Budget
Harbour Inc. budgeted production of 258,000 personal journals in 20Y6. Paper is required to produce a journal. Assume 5 square yards of paper are required for each journal. The estimated January 1, 20Y6, paper inventory is 25,100 square yards. The desired December 31, 20Y6, paper inventory is 17,000 square yards.
If paper costs $0.60 per square yard, determine the direct materials purchases budget for 20Y6.
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