Prepare a flexible budget for production for 15,000 and 20,000 units and indicate cost per unit at both the levels.
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.
- The expenses for budgeted production of 10,000 units in a Manufacturing
Company is given below:
|
Particulars |
Per unit |
|
Materials |
$25 |
|
Labor |
20 |
|
Variable over head |
20 |
|
Fixed |
30 |
|
Variable expenses (Direct) |
10 |
|
Selling expenses ( 10% fixed) |
20 |
|
Distribution expenses ( 25% fixed) |
10 |
|
Administration expenses ( $150,000) |
15 |
|
Total cost per unit |
$150 |
Prepare a flexible budget for production for 15,000 and 20,000 units and
indicate cost per unit at both the levels.
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