ABC Company's budgeted sales for June, July, and August are 12,600, 16,600, and 14,600 units, respectively. ABC requires 25% of the next month's budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 3,150 units. Each unit that ABC Company produces uses 4 pounds of raw material. ABC requires 20% of the next month's budgeted production as raw material inventory each month. Required: Calculate the number of pounds of raw material to be purchased in June
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.
![ABC Company's budgeted sales for June,
July, and August are 12,600, 16,600, and
14,600 units, respectively. ABC requires 25%
of the next month's budgeted unit sales as
finished goods inventory each month.
Budgeted ending finished goods inventory
for May is 3,150 units. Each unit that ABC
Company produces uses 4 pounds of raw
material. ABC requires 20% of the next
month's budgeted production as raw material
inventory each month. Required: Calculate
the number of pounds of raw material to be
purchased in June](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F403c7d4c-5c92-4ab3-8efa-dec287234bc3%2F5bf29267-41c3-4a9f-b2a5-240052d4a974%2Fi1zr3np_processed.jpeg&w=3840&q=75)
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