Jim Bowden, owner of Bowden Brake Service, is planning to expand his six-year- old brake service to include tune-ups and tire services. Based on budget estimates for the upcoming year, Jim expects net sales to be $982,277 with a cost of goods sold of $466,781 and total operating expenses of $248,480. From the budget he created, Jim computes fixed expenses to be $177,699. He used this to separate the total operating expenses into fixed and variable expenses. Jim is concerned that the new cost structure may damage his ability to produce a profit and he wants to perform a breakeven analysis for the upcoming year to gain insight. Compute the breakeven point for Jim's brake service.

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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.