### Fixed Budget Report for the Year Ended December 31, 2019 #### Sales - **Total Sales**: $3,000,000 #### Cost of Goods Sold - **Direct Materials**: $975,000 - **Direct Labor**: $225,000 - **Machinery Repairs (Variable Cost)**: $60,000 - **Depreciation—Plant Equipment (Straight-Line)**: $300,000 - **Utilities ($45,000 is Variable)**: $195,000 - **Plant Management Salaries**: $200,000 - **Total Cost of Goods Sold**: $1,955,000 #### Gross Profit - **Gross Profit**: $1,045,000 #### Selling Expenses - **Packaging**: $75,000 - **Shipping**: $105,000 - **Sales Salary (Fixed Annual Amount)**: $250,000 - **Total Selling Expenses**: $430,000 #### General and Administrative Expenses - **Advertising Expense**: $125,000 - **Salaries**: $241,000 - **Entertainment Expense**: $90,000 - **Total General and Administrative Expenses**: $456,000 #### Income from Operations - **Income from Operations**: $159,000
### Fixed Budget Report for the Year Ended December 31, 2019 #### Sales - **Total Sales**: $3,000,000 #### Cost of Goods Sold - **Direct Materials**: $975,000 - **Direct Labor**: $225,000 - **Machinery Repairs (Variable Cost)**: $60,000 - **Depreciation—Plant Equipment (Straight-Line)**: $300,000 - **Utilities ($45,000 is Variable)**: $195,000 - **Plant Management Salaries**: $200,000 - **Total Cost of Goods Sold**: $1,955,000 #### Gross Profit - **Gross Profit**: $1,045,000 #### Selling Expenses - **Packaging**: $75,000 - **Shipping**: $105,000 - **Sales Salary (Fixed Annual Amount)**: $250,000 - **Total Selling Expenses**: $430,000 #### General and Administrative Expenses - **Advertising Expense**: $125,000 - **Salaries**: $241,000 - **Entertainment Expense**: $90,000 - **Total General and Administrative Expenses**: $456,000 #### Income from Operations - **Income from Operations**: $159,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
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Classify all items listed in the fixed budget as variable or fixed.
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Transcribed Image Text:### Fixed Budget Report for the Year Ended December 31, 2019
#### Sales
- **Total Sales**: $3,000,000
#### Cost of Goods Sold
- **Direct Materials**: $975,000
- **Direct Labor**: $225,000
- **Machinery Repairs (Variable Cost)**: $60,000
- **Depreciation—Plant Equipment (Straight-Line)**: $300,000
- **Utilities ($45,000 is Variable)**: $195,000
- **Plant Management Salaries**: $200,000
- **Total Cost of Goods Sold**: $1,955,000
#### Gross Profit
- **Gross Profit**: $1,045,000
#### Selling Expenses
- **Packaging**: $75,000
- **Shipping**: $105,000
- **Sales Salary (Fixed Annual Amount)**: $250,000
- **Total Selling Expenses**: $430,000
#### General and Administrative Expenses
- **Advertising Expense**: $125,000
- **Salaries**: $241,000
- **Entertainment Expense**: $90,000
- **Total General and Administrative Expenses**: $456,000
#### Income from Operations
- **Income from Operations**: $159,000
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