Mackinac Inc. produces denim backpacks. The production budget for the next four months is: July 5,500 units, August 7,700 units, September 7,700 units, October 8,100 units. Each backpack requires 0.6 square meters of denim. Mackinac Inc.’s denim inventory policy is 30% of next month’s production needs. On July 1 leather inventory was expected to be 990 square meters. Denim is expected to cost $5.00 per square meter in June, but go up to $6.00 per square meter in July. What is the expected cost of denim purchases in July? Multiple Choice $23,076 $23,176 $22,176 $20,676
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.
Mackinac Inc. produces denim backpacks. The production budget for the next four months is: July 5,500 units, August 7,700 units, September 7,700 units, October 8,100 units. Each backpack requires 0.6 square meters of denim.
Mackinac Inc.’s denim inventory policy is 30% of next month’s production needs. On July 1 leather inventory was expected to be 990 square meters.
Denim is expected to cost $5.00 per square meter in June, but go up to $6.00 per square meter in July.
What is the expected cost of denim purchases in July?
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$23,076
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$23,176
-
$22,176
-
$20,676
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