Question
In: Accounting
Master Budget Basics
The McKnight Company expects sales in 2015 of 56,000 units of serving trays. McKnight has beginning inventory for 2015 of 2,000 trays, and its target ending inventory is 4,500 trays. Compute the number of trays budgeted for production in 2015.
Solutions
Expert Solution
the formula to calculate budgeted production number or value of production budget is given by :Units produced = our projected sales + our desired ending inventory – our beginning inventory (how much we have on hand)
the production budget calculates the number of units of products that must be manufactured, and is derived from a combination of the sales forecast and the planned amount of finished goods inventory to have on hand (usually as safety stock to cover for unexpected increases in demand). The production budget is typically prepared for a "push" manufacturing system, as is used in a material requirements planning environment
therefore to get the budget production in the year 2015:
the budgeted production value = $58,500
veronica makokha answered 3 years agoRelated Solutions
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QUESTION 2
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Master Budget Basics
The following information pertains to Hepburn Company.
Month
Sales
Purchases
January
$40000
$22000
February
$36000
$20200
March
$39600
$22600
Cash is collected from customers 20percent in the month of the sale and 80in the month immediately following the sale.
55percent of purchases are paid for in cash in the month of the purchase, and the balance is paid the following month.
Labor costs are 16percent of sales. Other operating costs are $35000per month, including $4000of depreciation. These costs are paid...
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