Before the year began, JenCo developed the following static budget for the estimated sales of 37,000 units. Sales are higher than expected and management needs to revise its budge For Year Ended May 31, 2019 Units sold Sales Cost of goods sold Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost of goods sold Gross profit Variable sales and administration expenses Fixed sales and administration expenses Income before taxes Taxes Net income Units sold Sales Prepare a flexible budget for 48,000 and 60,000 units of sales. Assume that the tax rate is 16% of the income. JenCo Cost of goods sold Direct material Direct labor 37,000 $1,295,000 111,000 333,000 111,000 43,000 $598,000 $697,000 111,000 44,000 542,000 86,720 $455,280 Variable manufacturing overhead Fixed manufacturing overhead Total cost of goods sold Gross profit Variable sales and administration expenses Fixed sales and administration expenses Income before taxes. Taxes Flexible Budget For Year Ended May 31, 2019 Per-unit cost 48,000 60,000
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.
![Before the year began, JenCo developed the following static budget for the estimated sales of 37,000 units. Sales are higher than expected and management needs to revise its budget.
JenCo
State Budget
For Year Ended May 31, 2019
Units sold
Sales
Cost of goods sold
Direct material
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead_
Total cost of goods sold
Gross profit
Variable sales and administration expenses,
Fixed sales and administration expenses
Income before taxes
Taxes
Net income
Units sold
Sales
Cost of goods sold
Direct material
Direct labor
37,000
$1,295,000
Prepare a flexible budget for 48,000 and 60,000 units of sales Assume that the tax rate is 16% of the income.
JenCo
Variable manufacturing overhead
Fixed manufacturing overhead
111,000
333,000
111,000
43,000
$598,000
$697,000
Total cost of goods sold_
Gross profit
Variable sales and administration expenses
Fixed sales and administration expenses
Income before taxes
Taxes
Net income
Flexible Budget
For Year Ended May 31, 2019
111,000
44,000
542,000
86,720
$455,280
Per-unit cost
48,000 60,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2af34dca-c4e3-445b-aa48-41f05d2c414f%2F48c7c4a2-c47a-49ac-bdc3-c4bfc0de8c2e%2Fnj3azeb_processed.jpeg&w=3840&q=75)
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