National Quality Paint Inc. (NQPI) produces paints in Geelong, Victoria. The accountant has presented you the following budgeted data for the fourth quarter of 2021. Sales are forecasted to be 60,000 cans at a price of $40 per can. The budgeted beginning and ending finished goods inventories are 4,000 and 9,000 units respectively. It is estimated that each can of paint requires two kilograms of input at a budgeted price of $5 per kg. The beginning raw materials inventory is estimated as 3,000 kilograms. NQPI wants to keep ending raw materials inventory of 4,200 due to fluctuations in demand. Production of each can is estimated to take 2 hours of labour at a standard pay rate of $18 per hour. Required: (please show all steps of your computation in proper format) Prepare a sales budget for the fourth quarter of 2021. Prepare a production budget for the fourth quarter of 2021.
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.
National Quality Paint Inc. (NQPI) produces paints in Geelong, Victoria. The accountant has presented you the following budgeted data for the fourth quarter of 2021. Sales are
Required: (please show all steps of your computation in proper format)
- Prepare a sales budget for the fourth quarter of 2021.
- Prepare a production budget for the fourth quarter of 2021.
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