Mirabel Manufacturing Budgeted Income Statement For the Year Ending December 31 $ Sales 36,750,000 Cost of goods sold: Variable 13,300,000 9,300,000 Fixed $ Gross Margin Selling & Administrative 14,150,000 Commissions $ 4,410,000 1,350,000 6,000,000 2,390,000 Fixed Marketing Expenses Fixed Administrative Net Operating Income $ Model 101 Model 201 Model 301 Normal Annual Sales Volume 16,000 19,000 11,000 Unit Selling Price Variable expense per unit 650 750 $ 1,100 $ 250 200 500
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.
- If the projection is that sales will increase by 10% in the coming year, can the company afford to also increase commission from 12% to 15%? Why or why not.
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