Pharoah Company combines its operating expenses for budget purposes in a selling and administrative expenses budget. For the first six months of 2022, the following data are available: 1. 2. 3. Sales: 19,600 units in quarter 1: 21,800 units in quarter 2 Variable costs per dollar of sales: sales commissions 5%; delivery expense 2%; and advertising 4% Fixed costs per quarter: sales salaries $9,300; office salaries $7,200; depreciation $4,600; insurance $1,700; utilities $700; and repairs expense $500 Unit selling price: $19 Prepare a selling and administrative expenses budget by quarters for the first six months of 2022.
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.
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