Flower ltd. budgeted to sell 200 units and produced the following budget. $ $Sales 71400Variable costs Labor 31600Material 12600 44200Contribution 27200Fixed Costs 18900Profit 8300Actual sales turned out to be 230 units, which were sold for $ 69000. Actual expenditure on labor was $ 27000 and on material $ 24000. Fixed costs totalled $10000.Required:Prepare a flexible budget that will be useful for management control purposes.
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.
Flower ltd. budgeted to sell 200 units and produced the following budget. $ $Sales 71400Variable costs Labor 31600Material 12600 44200Contribution 27200Fixed Costs 18900Profit 8300Actual sales turned out to be 230 units, which were sold for $ 69000. Actual expenditure on labor was $ 27000 and on material $ 24000. Fixed costs totalled $10000.Required:Prepare a flexible budget that will be useful for management control purposes.
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