Forrest Company manufactures phone chargers and has a JIT policy that ending inventory should equal 10% of the next month’s estimated unit sales. It estimates that October’s actual ending inventory will consist of 40,000 units. November and December sales are estimated to be 400,000 and 350,000 units, respectively. Compute the number of units to be produced in November.
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.
Forrest Company manufactures phone chargers and has a JIT policy that ending inventory should equal
10% of the next month’s estimated unit sales. It estimates that October’s actual ending inventory will consist
of 40,000 units. November and December sales are estimated to be 400,000 and 350,000 units, respectively.
Compute the number of units to be produced in November.
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