Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2. Wilmington budgeted 20,000 barrels of oil for purchase in June for $67 per barrel. Direct labor budgeted in the chemical process was $160,800 for June. Factory overhead was budgeted $241,200 during June. The inventories on June 1 were estimated to be: Oil $11,300 P1 7,600 P2 6,400 Work in process 9,300 The desired inventories on June 30 were: Oil $12,400 P1 6,900 P2 6,100 Work in process 9,600 Use the preceding information to prepare a cost of goods sold budget for June.
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.
12. Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2. Wilmington budgeted 20,000 barrels of oil for purchase in June for $67 per barrel. Direct labor budgeted in the chemical process was $160,800 for June. Factory overhead was budgeted $241,200 during June. The inventories on June 1 were estimated to be:
| Oil | $11,300 |
| P1 | 7,600 |
| P2 | 6,400 |
| Work in process | 9,300 |
The desired inventories on June 30 were:
| Oil | $12,400 |
| P1 | 6,900 |
| P2 | 6,100 |
| Work in process | 9,600 |
Use the preceding information to prepare a cost of goods sold budget for June.
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