d Tempo Company's fixed budget (based on sales of 16,000 units) folllows. Fixed Budget Sales (16,000 units x $214 per unit) Costs Direct materials Direct labor Indirect materials 3,424,000 368,000 688,000 432,000 Supervisor salary 168,000 Sales commissions 112,000 Shipping 240,000 Administrative salaries 218,000 Depreciation-Office equipment 188,000 Insurance 158,000 Office rent 168,000 Income 684,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 14,000 units and 18,000 units.
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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