Prepare the 2019 revenues budget (in RM). 1) Prepare the 2019 production budget (in unit) 2) Prepare the direct materials usage and purchases budgets.
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.
Case Study for Slopes Company.
Comprehensive operating budget. Slopes, Inc., manufactures and sells snowboards. Slopes manufactures a single model, the Pipex. In the summer of 2018, Slope’s accountant gathered the following data to prepare budgets for 2019:
Materials and labour requirements.
Direct materials:
Wood : 5 board feet per snowboard
Fiberglass : 6 yards per snowboard
Direct manufacturing labour : 5 hours per snowboard
Slopes’ CEO expects to sell 1,000 snow boards during 2019 at an estimated retail price of RM 450 per board. Further, he expects 2019 beginning inventory of 100 boards, and would like to end 2019 with 200 snowboards in stock.
Direct materials inventories:
Beginning Inventory Ending Inventory
1/1/2019 12/31/2019
Wood 2,000 1,500
Fiberglass 1,000 2,000
Variable manufacturing
Other data includes:
2018 Unit Price 2019 Unit Price
Wood RM 28 per b.f. RM 30 per b.f.
Fiberglass RM 4.80 per yard RM 5 per yard
Direct manufacturing labour RM 24 per hour RM 25 per hour
The inventoriable unit cost for ending finished goods inventory on December 31, 2018 is RM 374.80. Assume Slopes uses a first-in first-out inventory method for both direct materials and finished goods. Ignore work in process in your calculation. Required Use the data and projections supplied by Slopes’ managers.
Prepare the 2019 revenues budget (in RM).
1) Prepare the 2019 production budget (in unit)
2) Prepare the direct materials usage and purchases budgets.
Step by step
Solved in 4 steps
