Prepare a monthly flexible selling expense budget for Podism Company for sales volumes of $270,000, $350,000, and $480,000, based on the following data: Sales commissions 7% of sales Sales manager's salary $62,000 per month Advertising expense $70,000 per month Shipping expense 2% of sales Miscellaneous selling expense $2,500 per month plus 1/2% of sales
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.
Prepare a monthly flexible selling expense budget for Podism Company for sales volumes of $270,000, $350,000, and $480,000, based on the following data:
| Sales commissions | 7% of sales |
| Sales manager's salary | $62,000 per month |
| Advertising expense | $70,000 per month |
| Shipping expense | 2% of sales |
| Miscellaneous selling expense | $2,500 per month plus 1/2% of sales |
The variable costs changes with change in production level and fixed cost remains constant at every level of production.
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