by using Using the information developed below in this Submission, please write three pages discussing the following:

• Why is the preparation of a sales forecast one of the earliest steps in preparing a master budget?
• Explain at least three ways a company can benefit from preparing a formal budget.

Production Budget

Description July August Sept. Oct

Budgeted sales units 8,000 8,700 7,600 8,700

Add Desired ending inventory 3,480 3,040 3,480 3,520

Calculation =8700*40% =7600*40% =8700*40% =8800*40%

Total required units 11,480 11,740 11,080 12,220

Less Beg inventory 3,200 3,480 3,040 3,480

Budgeted production units 8,280 8,260 8,040 8,740

Material Purchases Budget

Description July August Sept. Oct

Budgeted production units 8,280 8,260 8,040 8,740

Per unit board feet required 12 12 12 12

Required board feet 99,360 99,120 96,480 104,880

Calculation =8280*12 =8260*12 =8040*12 =8740*12

Add desired ending inventory 29,736 28,944 31,464

Total board feet required 129,096 128,064 127,944

Less Beg inventory 29,808 29,736 28,944

Budgeted purchase board feet 99,288 98,328 99,000

Cost per board feet $0.70 $0.70 $0.70

Budgeted purchase in dollars $69,502 $68,830 $69,300