Mama Italiano Sauce is in the process of preparing a production cost budget for May. The actual costs in April were: Mama Italian Sauce Production Cost Budget April 2008 Production - Jars of sauce 20,000 Ingredient cost (variable) $16,000 Labor cost (variable) 9,000 Rent (fixed) 4,000 Depreciation (fixed) 6,000 Other (fixed) 1,000 Total $36,000 Using this information, prepare a budget for May stating the total amount for the May budget. Assume the budget will increase to 23,000 jars of sauce reflecting anticipated sales increase related to a new marketing campaign Round to two decimal places.
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.
Mama Italiano Sauce is in the process of preparing a production cost budget for May. The actual costs in April were:
|
Mama Italian Sauce |
|
|
Production Cost Budget |
|
|
April 2008 |
|
|
Production - Jars of sauce |
20,000 |
|
Ingredient cost (variable) |
$16,000 |
|
Labor cost (variable) |
9,000 |
|
Rent (fixed) |
4,000 |
|
|
6,000 |
|
Other (fixed) |
1,000 |
|
Total |
$36,000 |
Using this information, prepare a budget for May stating the total amount for the May budget. Assume the budget will increase to 23,000 jars of sauce reflecting anticipated sales increase related to a new marketing campaign
Round to two decimal places.
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