A company budgeted unit sales of 224000 units for January, 2017 and 260000 units for February 2017. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month's budgeted unit sales. If there were 67200units of inventory on hand on December 31, 2016, how many units should be produced in January, 2017 in order for the company to meet its goals? A. 234800 units B. 213200 units C. 224000 units D. 302000 units
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.
A company budgeted unit sales of 224000 units for January, 2017 and 260000 units for February 2017. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month's budgeted unit sales. If there were 67200units of inventory on hand on December 31, 2016, how many units should be produced in January, 2017 in order for the company to meet its goals?
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