Bramble manufactures competition stunt kites. In November, Joseph Moore prepared the following production budget for the first quarter of the coming year. Desired ending inventory is based on the following month's budgeted sales. January February March Quarter Budgeted sales 42,000 32,000 35,000 109,000 Desired ending inventory 6,400 7,000 2,400 2,400 Kites needed 48,400 39,000 37,400 111,400 Less beginning inventory 8,400 6,400 6,400 8,400 Budgeted production 40,000 32,600 31,000 103,000 Following lower-than-expected sales in December, Jerry conducted an inventory count on January 2 and discovered that the company had 3,000 completed kites on hand. He decided that given the slow sales in December, the company should decrease its desired ending inventory level from 20 to 10% of the next month's sales volume. (a) Prepare a new production budget for the first quarter.
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.
Bramble manufactures competition stunt kites. In November, Joseph Moore prepared the following production budget for the first quarter of the coming year. Desired ending inventory is based on the following month's budgeted sales.
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January
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February
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March
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Quarter
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|---|---|---|---|---|---|---|---|---|---|---|
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Budgeted sales
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42,000 | 32,000 | 35,000 | 109,000 | ||||||
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Desired ending inventory
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6,400 |
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7,000 |
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2,400 |
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2,400 | |||
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Kites needed
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48,400 | 39,000 | 37,400 | 111,400 | ||||||
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Less beginning inventory
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8,400 | 6,400 | 6,400 | 8,400 | ||||||
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Budgeted production
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40,000 |
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32,600 |
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31,000 |
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103,000 |
Following lower-than-expected sales in December, Jerry conducted an inventory count on January 2 and discovered that the company had 3,000 completed kites on hand. He decided that given the slow sales in December, the company should decrease its desired ending inventory level from 20 to 10% of the next month's sales volume.
(a) Prepare a new production budget for the first quarter.
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January
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February
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March
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Quarter
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select an opening production budget item
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enter a number of units | enter a number of units | enter a number of units | enter a number of units | ||||||
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select a production budget item
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enter a number of units |
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enter a number of units |
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enter a number of units |
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enter a number of units | |||
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select a summarizing line for the first part
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enter a total number of units for the first part | enter a total number of units for the first part | enter a total number of units for the first part | enter a total number of units for the first part | ||||||
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select a production budget item
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enter a number of units | enter a number of units | enter a number of units | enter a number of units | ||||||
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select a closing production budget item
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