Master Budget - produced to meet anticipated sales. Know...

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Master Budget Soriano Company is preparing its master budget for 2010. Relevant data pertaining to its sales, production, and direct materials budgets are as follows: Sales : Sales for the year are expected to total 1,200,000 units. 25%, 30%, and 25% respectively. The sales price is expected t three quarters and $55 per unit beginning in the fourth quarter. 2011 are expected to be 10% higher than the budgeted sales fo Production : Management desires to maintain the ending finish of the next quarter's budgeted sales volume. Direct materials : Each unit requires 3 pounds of raw materials Management desires to maintain raw materials inventories at 5 production requirements. Assume the production requirements are 820,000 pounds. Prepare the sales, production, and direct materials budgets by quarters for 2010. Solution Action Plan Know the form and content of the sales budget. Prepare the sales budget first, as the basis for the other budgets. Determine the units that must be
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Unformatted text preview: produced to meet anticipated sales. Know how to compute the beginning and ending finished goods units. Determine the materials required to meet production needs. Know how to compute the beginning and ending direct materials units. SORIANO COMPANY Sales Budget For the Year Ending December 31, 2010 2 3 240,000 300,000 360,000 $50 $50 $50 $12,000,000 $15,000,000 $18,000,000 $16,500,000 SORIANO COMPANY Production Budget For the Year Ending December 31, 2010 1 2 3 240,000 300,000 360,000 75,000 90,000 75,000 315,000 390,000 435,000 60,000 ** 75,000 90,000 255,000 315,000 345,000 SORIANO COMPANY Direct Materials Budget For the Year Ending December 31, 2010 2 3 315,000 345,000 3 3 945,000 1,035,000 51,750 43,650 996,750 1,078,650 ** 47,250 51,750 949,500 1,026,900 SORIANO COMPANY Direct Materials Budget For the Year Ending December 31, 2010 2 3 $5 $5 $4,747,500 $5,134,500 $4,351,750...
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Master Budget - produced to meet anticipated sales. Know...

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