E9.12 (LO 3), AP Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2020, the following data are available. Prepare a selling and administrative expense budget for 2 quarters. 1. Sales: 20,000 units quarter 1; 22,000 units quarter 2. 2. Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3%. 3. Fixed costs per quarter: sales salaries $12,000, office salaries $8,000, depreciation $4,200, insurance $1,500, utilities $800, and repairs expense $500. 4. Unit selling price: $20. Instructions Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020.

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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.