Idea Co is a company that produces paint. Sales projections and initial and final inventory data for 2021 are as follows:

Quarter

	1	2	3	4	Years
Unit	19,000	17,500	19,680	20,700	76,880
Price	10,000	10,000	10,000	10,000	10,000
Beg. Inv	1,000	1,340	600	1,120	1,000
End. Inv	1,340	600	1,120	1,000	1,000

Each can of paint requires 4 liters of thinner at a price of IDR 300/liter, where ending inventory is 25% of production need and beginning inventory is 2 times ending inventory. Each can of paint takes 20 minutes to produce, with a labor wage of IDR 50/minute. The variable overhead rate is IDR 750/minute/ direct labor. Fixed overhead budgeted IDR 20,000,000 per year.

Required:

1. You are asked to make a sales budget and production budget!
2. Explain why the sales budget is often referred to as the ‘cornerstone’ of budgeting?
3. Differentiate between authoritarian and participative styles of budgeting!

Answer rating: 100% (QA)

Sales Budget The sales budget for Idea Co is as follows Quarter 1 2 3 4 Total Sales 19000 17500 1968... View the full answer