Plas Hen Ltd produces wooden coffee tables. The budgeted output and sales for the month May 2020 was 4,400 tables. The standard cost is: £ Wood 20 sq. metres at £3 per sq metre 60.00 Labour 5 hours at £8 per hour 40.00 Variable overheads 5 hours at £4 per hour 20.00 Fixed overheads 5 hours at £9 per hour 45.00 Total production cost 165.00 Standard profit 33.00 Standard selling price 198.00
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.
Plas Hen Ltd produces wooden coffee tables. The budgeted output and sales for the month
May 2020 was 4,400 tables.
The
£
Wood 20 sq. metres at £3 per sq metre 60.00
Labour 5 hours at £8 per hour 40.00
Variable overheads 5 hours at £4 per hour 20.00
Fixed overheads 5 hours at £9 per hour 45.00
Total production cost 165.00
Standard profit 33.00
Standard selling price 198.00
The actual results were:
Wood 93,000 sq metres at £3.50 per sq metre
Labour 25,000 hours at £7.50 per hour
Variable overheads £95,000
Fixed overheads £195,000
Sales revenue £900,000
Actual production was 4,600 tables and sales were 4,500 tables.
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