ABC Company’s budgeted sales for June, July, and August are 12,800, 16,800, and 14,800 units respectively. The following cost behavior patterns are budgeted for ABC Company’s operating expenses each month: Fixed costs: salaries, $2,400; rent, $5,400; depreciation, $2,800; advertising, $3,600 Mixed costs: utilities, $3,400 + $0.60 per unitVariable costs per unit sold: sales commissions, $2.40; marketing promotions, $1.40; supplies, $0.95; bad debt expense, $0.45 How I prepare ABC Company’s operating expense budget for June, July, and August?
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.
ABC Company’s budgeted sales for June, July, and August are 12,800, 16,800, and 14,800 units respectively. The following cost behavior patterns are budgeted for ABC Company’s operating expenses each month: Fixed costs: salaries, $2,400; rent, $5,400;
How I prepare ABC Company’s operating expense budget for June, July, and August?
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