ABC Company makes one (1) product. Its sales price is expected to be P80 per unit. Actual sales for November 201A are 3,100 units, and 3,400 units for December 201A. ABC budgets its sales for the next six (6) months for 2018: 2,700 2,600 2,750 April May 2,500 2,900 3,000 January February March June All sales are on account. ABC collects its accounts as follows: 70% in the month of sale 20% in the month following sale 10% in the second month following sale Uncollectible accounts are negligible and can be disregarded. The beginning inventory on January 1, 201B is 270 units. ABC desires an ending inventory of 10% of the next month's budgeted sales. Each unit of finished goods requires 4 kg of raw materials that cost P3.00/kg. ABC desires an ending inventory of direct materials equal to 20% of the following month's production needs. Assume that ABC met this requirement at the end of December, 201A. ABC makes all purchases on account and pays its accounts payable as follows: 60% in the month of purchase and 40% in the month following purchase. Purchases in December 201A were P31,000. l Required Prepare the following by month for the first quarter of 201B and the first quarter as a whole. a. Sales budget (4 items) b. Production budget (4 items)
ABC Company makes one (1) product. Its sales price is expected to be P80 per unit. Actual sales for November 201A are 3,100 units, and 3,400 units for December 201A. ABC budgets its sales for the next six (6) months for 2018: 2,700 2,600 2,750 April May 2,500 2,900 3,000 January February March June All sales are on account. ABC collects its accounts as follows: 70% in the month of sale 20% in the month following sale 10% in the second month following sale Uncollectible accounts are negligible and can be disregarded. The beginning inventory on January 1, 201B is 270 units. ABC desires an ending inventory of 10% of the next month's budgeted sales. Each unit of finished goods requires 4 kg of raw materials that cost P3.00/kg. ABC desires an ending inventory of direct materials equal to 20% of the following month's production needs. Assume that ABC met this requirement at the end of December, 201A. ABC makes all purchases on account and pays its accounts payable as follows: 60% in the month of purchase and 40% in the month following purchase. Purchases in December 201A were P31,000. l Required Prepare the following by month for the first quarter of 201B and the first quarter as a whole. a. Sales budget (4 items) b. Production budget (4 items)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
Transcribed Image Text:АСTIVITY
ABC Company makes one (1) product. Its sales price is expected to be P80 per unit. Actual sales for November
201A are 3,100 units, and 3,400 units for December 201A. ABC budgets its sales for the next six (6) months for
201B:
January
February
2,700
2,600
2,750
Аpril
2,500
2,900
3,000
May
March
June
All sales are on account. ABC collects its accounts as follows:
70% in the month of sale
20% in the month following sale
10% in the second month following sale
Uncollectible accounts are negligible and can be disregarded. The beginning inventory on January 1, 201B is
270 units. ABC desires an ending inventory of 10% of the next month's budgeted sales.
Each unit of finished goods requires 4 kg of raw materials that cost P3.00/kg. ABC desires an ending inventory
of direct materials equal to 20% of the following month's production needs. Assume that ABC met this
requirement at the end of December, 201A. ABC makes all purchases on account and pays its accounts payable
as follows: 60% in the month of purchase and 40% in the month following purchase. Purchases in December
201A were P31,000.
Required
Prepare the following by month for the first quarter of 201B and the first quarter as a whole.
a. Sales budget (4 items)
b. Production budget (4 items)
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