Armati, Inc., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, Inc., had the following budgeted data: Unit sales for 2011 26,000 Unit production for 2011 26,000 Budgeted fixed costs for 2011: $2,900 Budgeted variable costs per unit: Direct materials $0.15 Direct labor $0.29 The following actually occurred: Actual unit sales for 2011 24,000 Actual unit production for 2011 28,000 Actual fixed costs for 2011: $2,950 Actual variable costs: $10,650 The flexible budget variance for total cost for 2011 is A. $1,280 U. B. $1,620 F. C. $1,670 F. D. $50 U.
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.
Armati, Inc., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below:
Armati, Inc., had the following budgeted data:
|
Unit sales for 2011 |
26,000 |
|
Unit production for 2011 |
26,000 |
|
|
|
|
Budgeted fixed costs for 2011: |
$2,900 |
|
|
|
|
Budgeted variable costs per unit: |
|
|
Direct materials |
$0.15 |
|
Direct labor |
$0.29 |
The following actually occurred:
|
Actual unit sales for 2011 |
24,000 |
|
Actual unit production for 2011 |
28,000 |
|
|
|
|
Actual fixed costs for 2011: |
$2,950 |
|
Actual variable costs: |
$10,650 |
The flexible
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