MM Co. predicts sales of $31,000 for May. MM Co. pays a sales manager a monthly salary of $3,100 plus a commission of 8% of sales dollars. MM's production manager recently found a way to reduce the amount of packing MM uses. As a result, MM's product will receive better placement on store shelves and thus May sales are predicted to increase by 10%. In addition, MM's shipping costs are predicted to decrease from 6% of sales to 5% of sales. Compute (1) budgeted sales and (2) budgeting selling expenses for May assuming MM switches to this more sustainable packaging. What are the results for (1) and (2) (1) budgeted sales (2) Budgeted selling expenses
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.
MM Co. predicts sales of $31,000 for May. MM Co. pays a sales manager a monthly salary of $3,100 plus a commission of 8% of sales dollars. MM's production manager recently found a way to reduce the amount of packing MM uses. As a result, MM's product will receive better placement on store shelves and thus May sales are predicted to increase by 10%. In addition, MM's shipping costs are predicted to decrease from 6% of sales to 5% of sales.
Compute (1) budgeted sales and (2) budgeting selling expenses for May assuming MM switches to this more sustainable packaging.
What are the results for (1) and (2)
(1) budgeted sales
(2) Budgeted selling expenses
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