Based on the following production and sales estimates for May, prepare the sales and production budgets: Estimated beginning inventory (units), May 1 18,000 Desired ending inventory (units), May 31 21,600 Expected sales volume (units): Area W 6,000 Area X 7,000 Area Y 8,000 Unit sales price $20
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.
7. Based on the following production and sales estimates for May, prepare the sales and production budgets:
|
Estimated beginning inventory (units), May 1 |
18,000 |
|
Desired ending inventory (units), May 31 |
21,600 |
|
Expected sales volume (units): |
|
|
Area W |
6,000 |
|
Area X |
7,000 |
|
Area Y |
8,000 |
|
Unit sales price |
$20 |
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