Cookie Cookie makes a product which has the following standard cost per item: £ Materials 3 kg at £5 per kg 15 Labour 5 hours at £5 per hour 25 Variable overhead 5 hours at £3 per hour 15 55 Contribution 25 Selling price 80
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.
Cookie
Cookie makes a product which has the following
|
|
|
£ |
|
Materials |
3 kg at £5 per kg |
15 |
|
Labour |
5 hours at £5 per hour |
25 |
|
Variable overhead |
5 hours at £3 per hour |
15 |
|
|
|
55 |
|
Contribution |
|
25 |
|
Selling price |
|
80 |
Budgeted production was 11,500, budgeted sales were 10,000 units (there was no opening inventory) and budgeted fixed costs were £115,000.
Actual results were as follows:
11,000 items were produced and 9,800 sold for total revenue of £793,800
35,600 kg of material were purchased for £160,200 and 34,420 kg used in production
54,500 hours of labour were used at a total cost of £287,175
Variable
Produce an operating statement for the period which reconciles the budgeted and actual profit under a marginal costing system.
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