ZXY Corporation manufactures a single product. It has a policy of keeping finishedgoods inventory amounting to 150% the coming month’s budgeted sales. Rawmaterials, on the other hand, are kept at twice the coming month’s budgeted production requirements. Each unit of product requires 4 kilos of raw materials. The production budgets (in units) consists of the following: March 5,000 units April 4,700 units May 5,500 units June 4,500 units Purchases of raw materials in May would be 15,600 kilos 17,200 kilos 18,000 kilos 24,000 kilos
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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ZXY Corporation manufactures a single product. It has a policy of keeping finishedgoods inventory amounting to 150% the coming month’s budgeted sales. Rawmaterials, on the other hand, are kept at twice the coming month’s budgeted production requirements. Each unit of product requires 4 kilos of raw materials. The production budgets (in units) consists of the following:
March 5,000 units
April 4,700 units
May 5,500 units
June 4,500 units
Purchases of raw materials in May would be
- 15,600 kilos
- 17,200 kilos
- 18,000 kilos
- 24,000 kilos
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