Executive Summary
Business decision making is always considered as a crucial part of any business especially when you are a new business or planning to launch a new product in the market. The same is going to happen in our company, Bottled Water Company. We are going to launch a new product and all the related analysis of projected numerical calculation is presented below. Basically, it is the explanation of master budget. Mater budget is defined as the aggregation of all the budgets which are produced by different parts of the company such as forecasting, financing plan, or financial statements (Tools, 2014). The numerical projection is based on the assessment for four (4) years so the intended users get the overview for considerable projected period. Here we are going to summarize it.
Sales Budget
Let us start with the projected sales budget.It explains that how many units a company is expecting to sell. The company is expecting to produce 40,000, 30,000, 50,000, and 55,000 units in first, second, third, and fourth year respectively. Therefore, the company is projecting to produce 175,000 units over the period of 4 years. The units expected to be sold out are estimated after assessing the in-depth market …show more content…
In case of production budget, Bottled Water Company has planned to make sure that it produces 39,000 units in first year and 32,000, 50,500, and 55,500 in year second, third, and fourth respectively. The company will do this by adding 10% of budgeted sales of next quarter as desired units of ending finished goods inventory, along with subtracting 10% of budgeted sale of current quarter as desired units of beginning finished goods inventory.So, in total company will be able to produce 177,000 units which is 2000 units more than expected sales units. The company has decided to do this to spread fixed cost over extra units to get advantage of higher profit
Business decision making is always considered as a crucial part of any business especially when you are a new business or planning to launch a new product in the market. The same is going to happen in our company, Bottled Water Company. We are going to launch a new product and all the related analysis of projected numerical calculation is presented below. Basically, it is the explanation of master budget. Mater budget is defined as the aggregation of all the budgets which are produced by different parts of the company such as forecasting, financing plan, or financial statements (Tools, 2014). The numerical projection is based on the assessment for four (4) years so the intended users get the overview for considerable projected period. Here we are going to summarize it.
Sales Budget
Let us start with the projected sales budget.It explains that how many units a company is expecting to sell. The company is expecting to produce 40,000, 30,000, 50,000, and 55,000 units in first, second, third, and fourth year respectively. Therefore, the company is projecting to produce 175,000 units over the period of 4 years. The units expected to be sold out are estimated after assessing the in-depth market …show more content…
In case of production budget, Bottled Water Company has planned to make sure that it produces 39,000 units in first year and 32,000, 50,500, and 55,500 in year second, third, and fourth respectively. The company will do this by adding 10% of budgeted sales of next quarter as desired units of ending finished goods inventory, along with subtracting 10% of budgeted sale of current quarter as desired units of beginning finished goods inventory.So, in total company will be able to produce 177,000 units which is 2000 units more than expected sales units. The company has decided to do this to spread fixed cost over extra units to get advantage of higher profit