Budgets that are tight but attainable are less likely to motivate people than budgets that are easy to achieve.

The direct labor budget is based on the budgeted sales levels.

Budgeted manufacturing overhead includes indirect manufacturing costs, but not selling and administrative costs.

Merchandising companies prepare the production budget after preparing the sales budget.

Budget preparation is best determined in a top-down managerial approach.

A master budget consists of

V Company produces hand tools. For March, budgeted sales are 16,000 units, beginning finished goods inventory is budgeted to be 1,000 units, and ending finished goods inventory is budgeted to be 1,200 units. How many units will be produced in March?

ABC Company produces hand tools. Budgeted sales will be:

April 14,000 units, May 16,000 units, June 18,000 units, and July 20,000 units. Ending finished goods inventory policy is 10% of the following months sales. What is the budgeted finished goods inventory for June?

ABC Company produces hand tools. Budgeted sales will be:

March 12,000 units, April 13,000 units, May 15,000 units and June 19,000 units. Ending finished goods inventory policy is 10% of the following month's sales. Projected beginning inventory for March 1,200 units, April 1,300, May 1,500, and June 2,000 units. How many units will be produced in March?

Seri has forecast production for the next three months as follows:

July 5,000 units, August 6,600 units, September 7,500 units. Monthly manufacturing overhead is budgeted to be P17,000 plus P5 per unit produced.

What is the budgeted manufacturing overhead for July?

Beau, Inc. produces leather handbags. The production budget for the next four months is: July 5,000 units, August 8,000 units, September 9,500 units and October 10,800 units. Each handbag requires 1.3 hours of unskilled labor (paid P10 per hour) and 2.2 hours of skilled labor (paid P20 per hour). How many unskilled and skilled labor hours will be budgeted for August?

Beau, Inc. produces leather handbags. The production budget for the next four months is: July 6,000 units, August 7,000 units, September 7,500 units and October 8,000 units. Each handbag requires 1.3 hours of unskilled labor (paid P8 per hour) and 2.2 hours of skilled labor (paid P15 per hour). How much will be paid to skilled labor during the Quarter 3 (July to September)?

V Shop's production budget for the first quarter was based on sales of 442,000 units and a beginning inventory of 12,900 units. How many units should be produced during the quarter if the company desires 15,000 units available to start the next quarter?

Selling and Administrative expense budget is similar to the manufacturing overhead budget as it includes variable and fixed expenses.

Budgeted fixed Selling and Administrative (S&A) expenses depend on the total cost expected to be incurred for each type of fixed S&A cost.

A short term objective is a specific action managers use to reach their long term goals.