1. Prepare a production budget for the first quarter of 2021 broken down by months. Include a total column. 2. Prepare a purchases budget for each type of raw materials also for the first quarter of 2021 broken down into months. Include a total colum.
1. Prepare a production budget for the first quarter of 2021 broken down by months. Include a total column. 2. Prepare a purchases budget for each type of raw materials also for the first quarter of 2021 broken down into months. Include a total colum.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...
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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.
Question
Transcribed Image Text:A sales budget for the first five months of 2021 is given on a certain
product line manufactured by Boots Styles, Inc.
Sales budget in units
January
157,000
February
162,000
March
204,000
April
May
223,000
245,000
The inventory of finished products at the end of each month is equal to
20% of the sales estimate for the next month. This requirement is expected to
be met by Jan. 1. No work is in process at the end of each month.
Each unit of product requires two types of raw materials as follows:
Material A
2 unit
Material B
6 units
The estimated cost of Material A is P5.00 per unit, and the estimated cost
of Material B is PO.60 per unit. Materials equal to 30% of next month's
production needs are to be on hand at the end of each month. This requirement
is expected to be met on Jan. 1.
REQUIRED:
1. Prepare a production budget for the first quarter of 2021 broken down by
months. Include a total column.
2. Prepare a purchases budget for each type of raw materials also for the first
quarter of 2021 broken down into months. Include a total colum.
Boots Style, Inc.
Production Budget
For the First Quarter of 2021
Extra
Jan.
Feb.
March
Total
April
Sales budget
Add: Ending inventory (20%)
Total requirements
Less: Beginning inventory
Production budget
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