Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2020, the following data are available. 1 Sales: 20,500 units quarter 1: 22.200 units quarter 2 Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3% Fixed costs per quarter: sales salaries $10,500, office salaries $6,250, depreciation $4,340, Insurance $2.000, utilities $860, and repairs expense $690. Unit selling price: $24. 2 3. 4 Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense)
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.
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