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Master Budget Overview and Components

The master budget includes budgets for expected cash collections, sales, production, materials, direct labor, manufacturing overhead, finished goods inventory, selling and administrative expenses, and income. It is created in 6 steps: 1) expected cash collections budget based on % of sales collected each month, 2) sales budget, 3) production budget based on desired ending inventory and sales budget, 4) materials budget based on materials needed per unit, 5) direct labor budget based on labor hours needed per unit, and 6) other manufacturing and non-manufacturing budgets. The master budget is used for decision making, such as whether to accept a special order, how to utilize a constrained resource, or whether to sell additional materials

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69 views6 pages

Master Budget Overview and Components

The master budget includes budgets for expected cash collections, sales, production, materials, direct labor, manufacturing overhead, finished goods inventory, selling and administrative expenses, and income. It is created in 6 steps: 1) expected cash collections budget based on % of sales collected each month, 2) sales budget, 3) production budget based on desired ending inventory and sales budget, 4) materials budget based on materials needed per unit, 5) direct labor budget based on labor hours needed per unit, and 6) other manufacturing and non-manufacturing budgets. The master budget is used for decision making, such as whether to accept a special order, how to utilize a constrained resource, or whether to sell additional materials

Uploaded by

t6s1z7
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

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Master Budget
8

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txpeutedCash Collectiom
stepo
.
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step ③ The
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pesired
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step ④ The Budget


prect Materials

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Mat errat
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unit 8 4w
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cost ( 30 )
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unrt J
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Ans: the additional wood would be used to make tables
Each board foot of additional wood will allow the company to earn an additional $20 of
contribution margin and profit.

Sell or process fomther

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