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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.
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- Apparelle Co. developed the following equation to predict certain components of its budget for the coming period: Costs = $50,000 + ($5 x direct labor hours) The $5 would approximate:a. total costb. direct labor rate per hourc. fixed cost per direct labor hourd. variable costs per direct labor hourNote: for credit you must show your calculations for this problem. The Magenta Company has provided the following information:Planned Production: 220,000 UnitsActual Production: 250,000 Units Selling price per unit $4.00Variable cost per unit $2.00Total fixed costs $220,000What is the Budgeted Net Operating Income using a Flexible Budget Methodology? View keyboard shortcuts EditViewInsertFormatToolsTable 12pt ParagraphOcean Company is conducting a cost-volume-profit (CVP) analysis and has just prepared thefollowing budget information for the coming year:Product Line Alpha Beta Ceta Total$ $ $ $Sales revenues 600,000 1,200,000 200,000 2,000,000Less: variable costs 480,000 800,000 120,000 1,400,000Contribution margin 120,000 400,000 80,000 600,000Less: fixed costs 330,000Net profit 270,000The budget assumes the sale of 20,000 units of Alpha, 100,000 units of Beta, and 40,000 unitsof Ceta.Required:(a) Determine the overall contribution margin ratio the company's break-even point in totalsales dollars. (b) Determine the company's break-even point in total units and individual product units atthe budgeted sales mix. (c) If total sales volume is increased to 200,000 units with the same budgeted sales mix,calculate the total amount of contribution margin and the net profit earned.
- Required information Use the following information for the Quick Study below. (Algo) [The following information applies to the questions displayed below.] The fixed budget for 21,900 units of production shows sales of $547,500; variable costs of $55,700; and fixed costs of $142,000. QS 21-3 (Algo) Flexible budget income calculation LO P1 If the company actually produces and sells 27,100 units, calculate the flexible budget income. Contribution margin. ----Flexible Budget------ Variable Amount Total Fixed per Unit Cost ------Flexible Budget at- 21,900 units 27,100 unitsMuhanga Corporation sells three products: R, S, and T. Budgeted information for the upcoming accounting period follows. Product Sales Volume (Units) Selling Price Variable Cost R 17,600 $ 19 $ 13 S 13,600 15 6 T 54,800 16 10 What is the company's weighted-average unit contribution margin?Required information Use the following information for the Quick Study below. (Algo) [The following information applies to the questions displayed below.] The fixed budget for 20,900 units of production shows sales of $564,300; variable costs of $62,700; and fixed costs of $143,000. QS 21-3 (Algo) Flexible budget income calculation LO P1 If the company actually produces and sells 26,400 units, calculate the flexible budget income. Sales Variable costs Contribution margin Fixed costs Income ----Flexible Budget- Variable Amount per Unit $ 0 Total Fixed Cost 20,900 units $ Flexible Budget at $ 26,400 units OS 0$ 0 0
- As a newly hired management accountant, you have been asked to prepare a profit plan for the company for which you work. As part of this task, you've been asked to do some what-if analyses. Following is the budgeted Information regarding the coming year: Selling price per unit Variable cost per unit Fixed costs (per year) Required: $ 100.00 60.00 1,113,040 1. What is the breakeven volume, in units and dollars, for the coming year? 2. Assume that the goal of the company is to earn a pretax (operating) profit of $316,000 for the coming year. How many units would the company have to sell to achieve this goal? 3. Assume that of the $60 variable cost per unit the labor-cost component is $27. Current negotiations with the employees of the company indicate some uncertainty regarding the labor cost component of the variable cost figure presented above. What is the effect on the breakeven point in units if selling price and fixed costs are as planned, but the labor cost for the coming year is…Check my work As a newly hired management accountant, you have been asked to prepare a profit plan for the company for which you work. As part of this task, you've been asked to do some what-if analyses. Following is the budgeted information regarding the coming year: Selling price per unit Variable cost per unit Fixed costs (per year) Required: $ 100.00 63.00 1,227,327 1. What is the breakeven volume, in units and dollars, for the coming year? 2. Assume that the goal of the company is to earn a pretax (operating) profit of $332,001 for the coming year. How many units would the company have to sell to achieve this goal? 3. Assume that of the $63 variable cost per unit the labor-cost component is $29. Current negotiations with the employees of the company indicate some uncertainty regarding the labor cost component of the variable cost figure presented above. What is the effect on the breakeven point in units if selling price and fixed costs are as planned, but the labor cost for the…Carousel Co. has prepared the following budget data: Sales, 150,000 units; selling price per unit, P25.00; variable cost per unit, P15.00; fixed costs and expenses, P1,300,000. An advertising agency claims that an aggressive advertising campaign would enable the company to increase its unit sales by 20%. What is the maximum amount that the company can pay for advertising and obtain a net operating income of P300,000?
- ) ML sells three products: Good, Better and Best. The market for the products dictates that the number of products sold are always in the ratio of 3Good:4Better:5Best. Budgeted sales volume and prices, and cost details for the previous period were as follows: Good Better Best Sales units 300 400 500 Selling price per unit GHS80 GHS55 GHS70 Contribution to sales ratio 70% 65% 50% The budgeted total fixed costs for the period were GHS31,200 Required: Calculate for that period: (i) The break-even sales revenue. (ii) The volume of each product that would have needed to be sold if the company had wanted to earn a profit of GHS29,520 in that period.Cold X, Inc. uses this information when preparing their flexible budget: direct materials of $2 per unit, direct labor of $3 per unit, and manufacturing overhead of $1 per unit. Fixed costs are $35,000. What would be the budgeted amounts for 20,000 and 25,000 units?Judges Gavel uses this information when preparing their flexible budget: direct materials of $3 per unit, direct labor of $2.50 per unit, and manufacturing overhead of $1.25 per unit. Fixed costs are $49,000. What would be the budgeted amounts for 33,000 and 35,000 units?