Bramble Possible Inc. (BP) is a manufacturer of toaster ovens. To improve control over operations, the president of BP wants to begin using a flexible budgeting system, rather than using only the current master budget. The following data are available for BP's expected costs at production levels of 115,200, 128,000, and 140,800 units. Variable costs Manufacturing Administrative Selling Fixed costs Manufacturing $7 per unit $4 per unit $3 per unit Administrative $204,800 $102,400 a) Prepare a flexible budget for each of the possible production levels: 115,200, 128,000, and 140,800 units. (List variable costs before fixed costs.) b) If BP sells the toaster ovens for $16 each, how many units will it have to sell to make a profit of $76,800 before taxes?
Bramble Possible Inc. (BP) is a manufacturer of toaster ovens. To improve control over operations, the president of BP wants to begin using a flexible budgeting system, rather than using only the current master budget. The following data are available for BP's expected costs at production levels of 115,200, 128,000, and 140,800 units. Variable costs Manufacturing Administrative Selling Fixed costs Manufacturing $7 per unit $4 per unit $3 per unit Administrative $204,800 $102,400 a) Prepare a flexible budget for each of the possible production levels: 115,200, 128,000, and 140,800 units. (List variable costs before fixed costs.) b) If BP sells the toaster ovens for $16 each, how many units will it have to sell to make a profit of $76,800 before taxes?
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.
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Transcribed Image Text:Bramble Possible Inc. (BP) is a manufacturer of
toaster ovens. To improve control over
operations, the president of BP wants to begin
using a flexible budgeting system, rather than
using only the current master budget. The
following data are available for BP's expected
costs at production levels of 115,200, 128,000,
and 140,800 units.
Variable costs
Manufacturing
Administrative
Selling
Fixed costs
Manufacturing
Administrative
$204,800
$102,400
a) Prepare a flexible budget for each of the
possible production levels: 115,200, 128,000,
and 140,800 units. (List variable costs before
fixed costs.)
b)
$7 per unit
$4 per unit
$3 per unit
If BP sells the toaster ovens for $16 each, how
many units will it have to sell to make a profit of
$76,800 before taxes?
Units to be
sold
enter a number of units
to be sold
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