Direct Material Purchases Budget: Langer Company produces plastic items, including palstic housings for humidifiers. Each housing requires about 15 ounces of plastic costing $0.08 per ounce. Langer molds the p;astic into the proper shape. Langer has budgeted of the housings for the next 4 months as follow: July, 3500 units; August, 4400 units; Sept. 4900 units; Oct. 6300 units. Inventory policy requires that sufficient plastic be in ednding monthtly inventory to atisfy 20% of the following month's procuction needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.
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.
Direct Material Purchases Budget:
Langer Company produces plastic items, including palstic housings for humidifiers. Each housing requires about 15 ounces of plastic costing $0.08 per ounce. Langer molds the p;astic into the proper shape. Langer has budgeted of the housings for the next 4 months as follow:
July, 3500 units; August, 4400 units; Sept. 4900 units; Oct. 6300 units.
Inventory policy requires that sufficient plastic be in ednding monthtly inventory to atisfy 20% of the following month's procuction needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.
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