E10.2 (LO 1), AN Crede Company budgeted selling expenses of $30,000 in January, $35,000 in February, and $40,000 in March. Actua selling expenses were $31,200 in January, $34,525 in February, and $46,000 in March. The company considers any difference that is less than 5% of the budgeted amount to be immaterial. Instructions a. Prepare a selling expense report that compares budgeted and actual amounts by month and for the year to date. b. What is the purpose of the report prepared in (a), and who would be the primary recipient? c. What would be the likely result of management's analysis of the report?
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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