). - Compute total variable cost per unit. - Compute total fixed costs. - Prepare a flexible budget at activity levels of 12,000 units and 16,000 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.
4).
- Compute total variable cost per unit.
- Compute total fixed costs.
- Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.
![Tempo Company's fixed budget (based on sales of 14,000 units) folllows.
Fixed Budget
Sales (14,000 units x $214 per unit)
Costs
Direct materials
Direct labor
Indirect materials
Supervisor salary
Sales commissions
Shipping
Administrative salaries
Depreciation-Office equipment
Insurance
Office rent
Income
2,996,000
350,000
616,000
392,000
150,000
126,000
196,000
200,000
170,000
140,000
150,000
506,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9e73faeb-754b-4598-beaf-65c4605dc4b7%2F4fc9fc85-5dcd-4e15-857d-1846b7c75cbd%2Fgt0ljpc_processed.png&w=3840&q=75)
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