Projected sales for Tony Co. Ltd for next year and beginning and ending inventory data are as follows: Sales 20,000 units Beginning Inventory 1,000 units Targeted ending inventory 5,000 units The selling price is $15 per unit. Each unit requires 3 kilograms of material which costs $2 per kg. The beginning inventory of raw materials is 3,000 kg. The company wants to have 2,400 kg of material in inventory at the end of the year. Kilograms of material to be purchased would be:
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.
Projected sales for Tony Co. Ltd for next year and beginning and ending inventory data are as follows:
|
|
Sales |
20,000 units |
|
|
Beginning Inventory |
1,000 units |
|
|
Targeted ending inventory |
5,000 units |
The selling price is $15 per unit. Each unit requires 3 kilograms of material which costs $2 per kg. The beginning inventory of raw materials is 3,000 kg. The company wants to have 2,400 kg of material in inventory at the end of the year.
Kilograms of material to be purchased would be:
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