For each unit of finished goods Surf Inc. needs 3 pounds of material. The production budget is shown below for the next 4 months: Description Month 1 Month 2 Month 3 Month 4 Production Budget in Units 14,000.00 15,000.00 16,000.00 12,000.00 Prepare the material purchases budget and show the total cost of material to purchase based on the following for Months 1-3
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.
| For each unit of finished goods Surf Inc. needs 3 pounds of material. The production budget is shown | ||||
| below for the next 4 months: | ||||
| Description | Month 1 | Month 2 | Month 3 | Month 4 |
| Production Budget in Units | 14,000.00 | 15,000.00 | 16,000.00 | 12,000.00 |
| Prepare the material purchases budget and show the total cost of material to purchase based | ||||
| on the following for Months 1-3 | ||||
| Beg Inv Month 1 | 8,800.00 | pounds of material | ||
| Cost per pound | $4.75 | |||
| Required Ending Inventory | 12% | of next months requirement | ||
| Description | Month 1 | Month 2 | Month 3 | |
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