Gxsport is a small business manufactures sportswear focusing on tracksuits. Gxsport perform very well in 2021 with yearly sales amounting to RM630,000, equivalent to 12,600 pieces sold. For the 1st quarter of 2022, the sales are predicted to increase by 7% as compared to 2021’s sales due to the raised of awareness for a healthy lifestyle. The price of the tracksuit is RM50 per piece. The labour rate is RM7 per hour and each piece of tracksuit requires 0.4 hours to make. Manufacturing overheads are charges at RM1.50 per piece. The inventory is expected to have a balance of 500 pieces of tracksuits as at 1st January 2022 and increase by 10% as at 31st March 2022. 1. Calculate the production budget (in unit) for the 1st quarter 2022 (1st January to 31st March 2022).
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.
1. Gxsport is a small business manufactures sportswear focusing on tracksuits. Gxsport
perform very well in 2021 with yearly sales amounting to RM630,000, equivalent to 12,600
pieces sold. For the 1st quarter of 2022, the sales are predicted to increase by 7% as
compared to 2021’s sales due to the raised of awareness for a healthy lifestyle.
The price of the tracksuit is RM50 per piece. The labour rate is RM7 per hour and each
piece of tracksuit requires 0.4 hours to make. Manufacturing overheads are charges at
RM1.50 per piece. The inventory is expected to have a balance of 500 pieces of tracksuits
as at 1st January 2022 and increase by 10% as at 31st March 2022.
1. Calculate the production budget (in unit) for the 1st quarter 2022 (1st January to 31st March
2022).
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