A company’s static budget estimate of total shipping cost was $100,000 based on theassumption that 10,000 units would be produced and sold. The company estimatesthat 30% of this amount is variable and the remainder is fixed. What would be thetotal shipping cost if 12,000 units were produced and sold?a. $96,000b. $100,000c. $106,000d. $116,000
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.
A company’s static budget estimate of total shipping cost was $100,000 based on the
assumption that 10,000 units would be produced and sold. The company estimates
that 30% of this amount is variable and the remainder is fixed. What would be the
total shipping cost if 12,000 units were produced and sold?
a. $96,000
b. $100,000
c. $106,000
d. $116,000
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