Bruins plc’s budget for the first month of trading, during which production of 3,000 units and sales of 2,700 units are predicted, is as follows: Variable productions costs £136,000; fixed production costs £102,500; selling price is £500 per unit. The profit calculated on the absorption cost basis compared to the marginal cost basis will be a) £10,250 lower b) £13,600 higher c) £13,600 lower d) £10,250 higher
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.
Bruins plc’s budget for the first month of trading, during which production of 3,000 units and sales of 2,700 units are predicted, is as follows:
Variable productions costs £136,000; fixed production costs £102,500; selling price is £500 per unit.
The profit calculated on the absorption cost basis compared to the marginal cost basis will be
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a) £10,250 lower
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b) £13,600 higher
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c) £13,600 lower
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d) £10,250 higher
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