Master Budget Flexible Budget Actual Results Revenue $50,000 $55,000 $45,000 Variable costs $20,000 $22,000 $20,000 Contribution margin $30,000 $33,000 $25,000 Fixed costs $ 7,000 $ 7,000 $ 5,500 Profit $23,000 $26,000 $19,500 Using the information above, compute total profit variance: $5,000 Unfavorable $5,000 Favorable $3,500 Unfavorable $3,500 Favorable
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.
Using the information above, compute total profit variance:
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$5,000 Unfavorable
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$5,000 Favorable
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$3,500 Unfavorable
-
$3,500 Favorable
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