Calculate Glidden’s budgeted net income for 2023. 2.Assuming that the sales mix stays as budgeted, calculate how many units of each product Glidden must sell to break even in 2023. 3.Calculate the total dollar sales Glidden must sell in 2023 to earn an after tax income of $ 450,000.
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.
Problem 1
Glidden Company manufactures a line of chocolate bars that are sold in various department and grocery stores. The company’s controller has just received the sales
High Sugar High Protein No Sugar
Unit sales 100,000 100,000 200,000
Unit selling price $ 48 $ 56 $ 68
Variable
Variable selling cost per unit $ 7 $ 6 $ 10
For 2023, Glidden’s fixed factory overhead is budgeted at $ 2,000,000 and the company’s fixed, selling and administrative expenses are forecasted to be $ 600,000. Glidden’s income tax rate is 40%.
Required: (Show all calculations. Round to the nearest whole unit or dollar)
1.Calculate Glidden’s budgeted net income for 2023.
2.Assuming that the sales mix stays as budgeted, calculate how many units of each product Glidden must sell to break even in 2023.
3.Calculate the total dollar sales Glidden must sell in 2023 to earn an after tax income of $ 450,000.
4.After preparing the original cost estimates, Glidden determined that its variable manufacturing cost of No Sugar chocolate bars would increase $4 per unit and the variable cost of selling High Protein chocolate bars could be expected to increase $ 1 per unit. However, Glidden has decided not to change the selling price of either product. Also, Glilden has learned its No Sugar bars has been perceived as the best value of the market and it can be expected to sell three times as many No Sugar bars as any other product. Under these circumstances, calculate how many units of each product Gllidden would have to sell to breakeven in 2023.
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