operating costs wer
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.
Roger Company’ sells one product, and has provided the following variable and fixed estimates for budgeting
purposes.
Variable element per unit Fixed element per month
Revenue $25
Operating costs $4.75 $3,150
For the month of August, it planned on selling 200 units, but actual units sold were 180 units. Actual revenue
for the month was $4,410 and actual operating costs were $3,865.
c. Find the activity variance for revenue and operating costs for August. What would these variances
indicate?
d. Find the revenue and spending variance for revenue and operating costs for August. What would these
variances indicate?
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