Haven Company has accumulated the following budget data for the year 2022: Sales: 30,000 units; unit selling price $80 Cost of one unit of finished goods: direct materials, 2 kg at $5 per kilogram; direct labour, three hours at $12 per hour; and manufacturing overhead, $6 per direct labour hour Inventories (raw materials only): beginning, 10,000 kg; ending, 15,000 kg Raw materials cost: $5 per kilogram Selling and administrative expenses: $200,000 Income taxes: 30% of income before income taxes Instructions Prepare a schedule showing the calculation of the cost of goods sold for 2022. Prepare a budgeted income statement for 2022.
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.
Haven Company has accumulated the following budget data for the year 2022:
- Sales: 30,000 units; unit selling price $80
- Cost of one unit of finished goods: direct materials, 2 kg at $5 per kilogram; direct labour, three hours at $12 per hour; and manufacturing
overhead , $6 per direct labour hour - Inventories (raw materials only): beginning, 10,000 kg; ending, 15,000 kg
- Raw materials cost: $5 per kilogram
- Selling and administrative expenses: $200,000
- Income taxes: 30% of income before income taxes
Instructions
- Prepare a schedule showing the calculation of the cost of goods sold for 2022.
- Prepare a
budgeted income statement for 2022.
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