Hanover Inc. sells buckets for $15 each. Budgeted unit sales for 4 months of 2014 are: March 26,000 buckets April 28,000 buckets May 22,000 buckets June 25,000 buckets Hanover desires to have buckets on hand at the end of each month equal to 16 percent of the following month’s budgeted unit sales. Each bucket requires 3.9 pounds of plastic. At the end of each month, Hanover desires to have 12 percent of production material needs for the next month on hand. The plastic costs $0.40 per pound. How many buckets should Hanover produce during May?
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.
Hanover Inc. sells buckets for $15 each. Budgeted unit sales for 4 months of 2014 are:
March 26,000 buckets
April 28,000 buckets
May 22,000 buckets
June 25,000 buckets
Hanover desires to have buckets on hand at the end of each month equal to 16 percent of the following month’s budgeted unit sales. Each bucket requires 3.9 pounds of plastic. At the end of each month, Hanover desires to have 12 percent of production material needs for the next month on hand. The plastic costs $0.40 per pound. How many buckets should Hanover produce during May?
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