Hamlet House makes portable garden sheds that sell for $1,800 each. The tax rate for the company is 35 percent. Costs are as follows: Per Unit Total Direct material $800 Direct labor 90 Variable production overhead 60 Variable selling and administrative cost 50 Fixed production overhead $280,000 Fixed selling and administrative 84,000 a. If Hamlet House wants to earn an after-tax profit of $254,800, how many garden sheds must be sold? Answer garden sheds b. How many garden sheds must be sold to yield an after-tax profit of 8 percent of revenue? Note: Do not round until your final answer. Note: Round your final answer up to the nearest whole unit (for example, round 5.1 to 6 units). Answer garden sheds c. How much revenue is generated from selling units calculated in part (b)? $Answer
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.
Hamlet House makes portable garden sheds that sell for $1,800 each. The tax rate for the company is 35 percent. Costs are as follows:
| Per Unit | Total | |
|---|---|---|
| Direct material | $800 | |
| Direct labor | 90 | |
| Variable production |
60 | |
| Variable selling and administrative cost | 50 | |
| Fixed production overhead | $280,000 | |
| Fixed selling and administrative | 84,000 |
a. If Hamlet House wants to earn an after-tax profit of $254,800, how many garden sheds must be sold? Answer
garden sheds
b. How many garden sheds must be sold to yield an after-tax profit of 8 percent of revenue?
Note: Do not round until your final answer.
Note: Round your final answer up to the nearest whole unit (for example, round 5.1 to 6 units).
Answer
garden sheds
c. How much revenue is generated from selling units calculated in part (b)? $Answer
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