Down Products, Ltd of Australia has budgeted sales of its popular brand for the next four months as follows: Sales in Units April 50,000 May 75,000 June 90,000 July 80,000 The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end of month inventory levels must equal 10% of the following month’s sales. The inventory at the end of March was 5000 units. Prepare production budget for the second quarter, in your budget; show the number of units to be produced each month and for the quarter in total.
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.
Down Products, Ltd of Australia has budgeted sales of its popular brand for the next four months as follows:
Sales in Units
April 50,000
May 75,000
June 90,000
July 80,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end of month inventory levels must equal 10% of the following month’s sales. The inventory at the end of March was 5000 units.
Prepare production budget for the second quarter, in your budget; show the number of units to be produced each month and for the quarter in total.
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