oyal Ltd has a varied client base that includes schools, hospitals, and the hospitality sector and has experienced fluctuating consumer demands since the beginning of the Covid-19 pandemic. One of their products is a fresh produce box, consisting of local seasonal produce, and which is ordered in units. The following information is available for the year ending 30th September. Due to these fluctuating demands, you have been asked to use Excel to prepare a flexible sales budget for quantities of 200,000 units and 300,000 units. Sales revenue is fully variable. Budget Sales (units) 250,000 £/unit £000s Sales revenue 3,250 Variable produce costs (875) Variable production overheads (150) Fixed production costs (700) Fixed administration costs (1,160) Profit 365
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.
Royal Ltd has a varied client base that includes schools, hospitals, and the hospitality sector and has experienced fluctuating consumer demands since the beginning of the Covid-19 pandemic.
One of their products is a fresh produce box, consisting of local seasonal produce, and which is ordered in units. The following information is available for the year ending 30th September.
- Due to these fluctuating demands, you have been asked to use Excel to prepare a flexible sales budget for quantities of 200,000 units and 300,000 units. Sales revenue is fully variable.
|
Budget |
||
|
Sales (units) |
250,000 |
|
|
£/unit |
£000s |
|
|
Sales revenue |
3,250 |
|
|
Variable produce costs |
(875) |
|
|
Variable production |
(150) |
|
|
Fixed production costs |
(700) |
|
|
Fixed administration costs |
(1,160) |
|
|
Profit |
365 |
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