You would like to know how much should your business purchase for the month of February 2020. The December 2019 sales is 50,000 units and this is expected to increase by 1% per month. The inventory balance as of Dec. 31, 2019 is 4,000 units and you aim to maintain 10% of the month’s sale already to be on hand at the beginning of each month. So far, it is likely that the forecast for January will be achieved. Assuming that cost per unit is maintained at P40, how much would the total purchases be for February? *Note round OFF forecasted units to be sold to whole numbers and round UP the required balance to whole numbers.
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.
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You would like to know how much should your business purchase for the month of February 2020. The December 2019 sales is 50,000 units and this is expected to increase by 1% per month. The inventory balance as of Dec. 31, 2019 is 4,000 units and you aim to maintain 10% of the month’s sale already to be on hand at the beginning of each month. So far, it is likely that the |
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Assuming that cost per unit is maintained at P40, how much would the total purchases be for February? *Note round OFF forecasted units to be sold to whole numbers and round UP the required balance to whole numbers.
Thank you in advance, I really appreciate your help ^_^ |
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