Matt Ltd is currently preparing the production budget for steering wheel covers and the material purchases budget for plastic for the upcoming year. Each unit of steering wheel cover requires 5kg of plastic material. The anticipated opening stock of steering wheel cover is 5,000 units Matt Ltd wishes to increase the closing stock of steering wheel covers by 30% by the end of the year. The anticipated opening stock for plastic material is 50, 000 kg and in order to avoid stock - outs the required closing stock has been increased to 60, 000kg., The Sales manager confirmed expected sales of 70,000 units of steering wheel covers. b. What will be the purchases budget for plastic material in kg ?
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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