Production budget sk inc estimates its unit sales to

Production budget
SK Inc. estimates its unit sales to be 1,800
units in January. The estimated selling price is
$100 per unit.
The company estimates beginning inventory
to be 50 units and desires ending inventory
to be 250 units.

Production budget
Estimated units to be sold 1,800 units
+ Desired Ending Finished Goods Inventory
250
- Beginning Finished Goods Inventory (50)
= Units to be produced 2,000 units

Master Budget
Direct Materials Budget
DM to be used (based on production)
27,000 lbs.
+ Desired Ending DM Inventory 3,000
– Estimated Beginning DM Inventory (2,000)
= DM required 28,000 lbs.
x Cost of DM per unit $10
Cost of DM purchases
$280,000
Additional information
Units to be produced 2,000 units
Cost of DM per unit $10 per pound
DM required per unit:13.5 per pound

Master Budget
Direct Labor Budget
Direct labor hours 10,000 DLH
x Direct Labor (hourly) rate $20
Cost of Direct labor $200,000
Additional information
Units to be produced 2,000 units
Hours required per unit 5 DLH
Labor rate per hour $20

Overhead Budget
Variable Overhead $70,000
Fixed Overhead 30,000
Total Overhead $100,000
Master Budget

Master Budget
Selling and Administrative Expense
Budget
Variable Selling & Administrative Expenses
$160,000
Fixed Selling & Administrative Expenses
210,000
Total Selling & Administrative Expenses
$370,000

Master Budget
Cash Budget
Cash receipts budget $50,000
Cash disbursements budget 36,000
Increase (Decrease) in cash $14,000
Beginning cash balance 8,000
Ending cash balance $22,000