Candy Cane Company At the beginning of the holiday season, Candy Cane Company estimated that sales would be 50,000 boxes of chocolate. Actual sales totaled 70,000 boxes of chocolate. The product manager expected a large bonus based upon the additional income that a 40% increase in sales would provide. Imagine her surprise upon seeing the following report: Master Budget Actual Results 50,000 70,000 $250,000 $300,000 Number of boxes Sales revenues Less variable costs: Materials Labor Overhead S,G,&A 60,000 50,000 25,000 10,000 Total variable costs 145,000 Contribution margin 105,000 Less fixed costs: Manufacturing 15,000 30,000 45.000 $60,000 82,000 67,000 36,000 15,000 200,000 100,000 16,000 28,000 44,000 $56,000 S,G,&A Total fixed costs Net income The company's owner is very upset charging that the product manager did such a poor job of controlling costs. Required: 1.) Prepare a performance report that can be used to evaluate the owner's charge that the product manager did a poor job of controlling costs. Be sure to label variances as favorable or unfavorable. 2.) Is the owner justified in charging the manager with poor cost control? Why or why not?

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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.