As a result of this increase in sales, would you expect any other items to come in over (or under) their budgeted amounts? If so, list the items and describe why they would vary from the budget.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Assume that you manage one store in a chain of sporting goods retailers. Each month, your store is evaluated by comparing actual operating results to budgeted results. During December of the current year, your store’s sales were up 25% from sales projected on the budget. As a result of this increase in sales, would you expect any other items to come in over (or under) their budgeted amounts? If so, list the items and describe why they would vary from the budget.
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