Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit Budgeted unit sales (all on credit): October November December January Raw materials requirement per unit of output Raw materials cost Direct labor requirement per unit of output Direct labor wage rate Predetermined overhead rate (all variable) Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month $ 118 9,600 10,100 13,700 11,300 3 pounds $ 4.00 per pound 2.7 direct labor-hours $23.00 per direct labor- hour $12.00 per direct labor- hour The ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. If the budgeted cost of raw materials purchases in October is $116,772 and in November is $129,120, then in November the total budgeted cash disbursements for raw materials purchases is closest to:
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.
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