Concord Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,500 kits was prepared for the year. Fixed operating expenses account for 75% of total operating expenses at this level of sales. Sales Revenue Cost of goods sold (all variable) Gross margin $230,000 $140,000 $90,000 Operating expenses Operating Income Prepare a flexible budget based on sales of 1,000, 2,920, and 3,660 units $50,000 $40,000 Prepare a flexible budget based on sales of 1,000, 2,920, and 3,660 units. (Round unit values to 2 decimal places e.g. 15.25 and all other answers to 0 decimal places, e.g. 1525. If operating income is negative, enter amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Concord Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,500 kits was prepared for the year. Fixed operating expenses account for 75% of total operating expenses at this level of sales. Sales Revenue Cost of goods sold (all variable) Gross margin $230,000 $140,000 $90,000 Operating expenses Operating Income Prepare a flexible budget based on sales of 1,000, 2,920, and 3,660 units $50,000 $40,000 Prepare a flexible budget based on sales of 1,000, 2,920, and 3,660 units. (Round unit values to 2 decimal places e.g. 15.25 and all other answers to 0 decimal places, e.g. 1525. If operating income is negative, enter amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Concord Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of
2,500 kits was prepared for the year. Fixed operating expenses account for 75% of total operating expenses at this level of sales.
Sales Revenue
Cost of goods sold (all variable)
Gross margin
Operating expenses
Operating Income
Prepare a flexible budget based on sales of 1,000, 2,920, and 3,660 units
Sales revenue
Prepare a flexible budget based on sales of 1,000, 2,920, and 3,660 units. (Round unit values to 2 decimal places e.g. 15.25 and all other
answers to O decimal places, e.g. 1525. If operating income is negative, enter amounts using a negative sign preceding the number e.g. -45 or
parentheses e.g. (45).)
Less
Variable expenses
Cost of goods sold
Operating expenses
Total variable expenses
Contribution margin
Fixed expenses
Operating income
Unit
$
$230,000
$140,000
$90,000
$50,000
$40,000
$
$
92
1000
1,000
$
$
2,920
$
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