Exercise 9-10 (Algo) Flexible Budget [LO9-1] Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries. Depreciation Administrative expenses Rent For example, electricity costs should be $1,100 per month plus $0.10 per car washed. The company actually washed 8,200 cars in August and collected an average of $6.80 per car washed. Lavage Rapide Flexible Budget For the Month Ended August 31 Budgeted cars washed Revenue Expenses: Required: Prepare the company's flexible budget for August. Rent Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Administrative expenses Total expense Net operating income Fixed Cost per Month $ 1,100 $ 4,400 $ 8,000 $ 1,800 $ 1,400 $ $ 8,200 55,760 Cost per Car Washed 0 $ 0.50 $ 0.10 $ 0.20 $ 0.20 55,760 $ 0.02

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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.