Atlantic Surf manufactures surfboards. The company’s sales budget for the next three months is shown below. In addition, company policy is to maintain finished goods inventory equal (in units) to 40% of the next month’s unit sales. As of June 30, the company has 1,600 finished surfboards in inventory, which complies with the policy. Prepare a production budget for the months of July and August. July August September Sales in units 4,000 6,500 3,500
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.
Atlantic Surf manufactures surfboards. The company’s sales budget for the next three months is shown
below. In addition, company policy is to maintain finished goods inventory equal (in units) to 40% of the
next month’s unit sales. As of June 30, the company has 1,600 finished surfboards in inventory, which
complies with the policy. Prepare a production budget for the months of July and August.
July August September
Sales in units 4,000 6,500 3,500
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