Farooq Company has accumulated the following budget data for the year 2020. Sales: 60,000 units, unit selling price $80. Cost of one unit of finished goods: Direct materials 3 pounds at $5 per pound, direct labor 3 hours at $6 per hour, and manufacturing overhead $7 per direct labor hour. Selling and administrative expenses: $750,000. Income taxes: 30% of income before income taxes. Instructions Prepare a schedule showing the computation of cost of goods sold for 2020. Prepare a budgeted income statement for 2020.
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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