King purchases two components for its primary product. They need 3 of Component A and 2 of Component B for each unit of the primary product. Component A costs $3; Component B costs $5. Other facts: Forecasted Primary Product Production: January: 19,500 units February: 19,600 units March: 23,000 units April: 27,000 units Ending component inventory should equal 20% of next month’s production needs. Assume December’s ending inventory met this requirement. Calculate purchases for both Components in both units and dollars by month for Q1.
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.
King purchases two components for its primary product. They need 3 of Component A and 2 of Component B for each unit of the primary product. Component A costs $3; Component B costs $5. Other facts:
January: 19,500 units
February: 19,600 units
March: 23,000 units
April: 27,000 units
Ending component inventory should equal 20% of next month’s production needs. Assume December’s ending inventory met this requirement.
Calculate purchases for both Components in both units and dollars by month for Q1.
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