On January 1, 2022, the Sheffield Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2022. Sales units: Ending raw materials inventory: Ending finished goods inventory: Third-quarter production: First quarter 7,300; second quarter 8,760; third quarter 10,220. 40% of the next quarter's production requirements. 25% of the next quarter's expected sales units. 10,570 units. The ending raw materials and finished goods inventories at December 31, 2021, follow the same percentage relationships to production and sales that occur in 2022. Three pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound.

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…

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…