Annie's Homemade is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Fixed Cost Cost per Cost per Per Month Serving Labor-Hour $ 1.25 $ 7,000 $ 8.00 $ 300 Rent expense $ 3,000 Equipment depreciation expense $1,750 Other expenses $ 4,200 $ 0.25 $ 0.09 $ 0.02 In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00. Required: Prepare a flexible budget for August.
Annie's Homemade is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the company's cost formulas are shown below: Ingredients expense Salaries and wages expense Franchise fee Credit card processing fees Utilities expense Fixed Cost Cost per Cost per Per Month Serving Labor-Hour $ 1.25 $ 7,000 $ 8.00 $ 300 Rent expense $ 3,000 Equipment depreciation expense $1,750 Other expenses $ 4,200 $ 0.25 $ 0.09 $ 0.02 In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per serving is $5.00. Required: Prepare a flexible budget for August.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Annie's Homemade is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost
drivers-number of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee
labor-hours in August. Data concerning the company's cost formulas are shown below:
Ingredients expense
Salaries and wages expense
Franchise fee
Credit card processing fees
Utilities expense
Rent expense
Equipment depreciation expense
Other expenses
Fixed Cost Cost per
Per Month Serving
$ 1.25
$7,000
Required:
Prepare a flexible budget for August.
$ 300
$ 3,000
$ 1,750
$4,200
$ 0.25
$ 0.09
$ 0.02
Cost per
Labor-Hour
$ 8.00
In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. It's budgeted revenue per
serving is $5.00.
Transcribed Image Text:Revenue
Expenses:
Ingredients expense
Salaries and wages expense
Franchise fee
Credit card processing fees
Utilities expense
Rent expense
Equipment depreciation expense
Other expenses
Total expense
Net operating income
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