. Decrease beverage costs to 20% Decrease payroll costs to 32% (but benefit costs will increase by 6% over the initi budget because of new payroll taxes not included in the original budget) Decrease operating expenses to 12% of total revenue (Fixed costs will remain at the same dollar amount as in the original budget.) What is the revised estimate of budgeted profit before tax?
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.
Budgeted Profit
A business's budgeted profit calculation serves as a forecast of its financial performance. The business owner creates a budget based on anticipated income and the costs necessary to obtain that revenue at the beginning of each fiscal period. The budget should account for costs such planned expenses and capital expenditure repayments in order to determine the possible profit for the time. However, as assets and depreciation relate to the overall value of the business rather than the profit for a particular time, they may be removed from this computation.
Step by step
Solved in 3 steps