Amanda Manufacturing Company prepared the following static budget income statement: Revenues $ 172,250 Variable Costs (107,250 ) Contribution Margin 65,000 Fixed Costs (36,000 ) Net Income $ 29,000
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.
Amanda Manufacturing Company prepared the following static
| Revenues | $ | 172,250 | ||
| Variable Costs | (107,250 | ) | ||
| Contribution Margin | 65,000 | |||
| Fixed Costs | (36,000 | ) | ||
| Net Income | $ | 29,000 | ||
The budgeted costs were based on a planned sales volume of 6,500 units. Actual production was 6,300 units.
The amount of net income based on a flexible budget of 6,300 units would have been
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$20,700.
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$22,700.
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$27,000.
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$71,250.
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