Problem IV. The U Store, Inc. is the major supplier of books for the four area colleges. An income statement for the first quarter of 2020 is presented below: Sales 800,000 Cost of Goods Sold 560,000 Gross Margin 240,000 Less: Operating Expenses Selling Expenses 105,000 Administrative Expenses 105,000 210,000 Net Income 30,000 On average, a book sells for P40. Variable selling expenses are P3 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder is fixed. The contribution margin for the U Store for the first quarter of 2020 is?
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.
Problem IV. The U Store, Inc. is the major supplier of books for the four area colleges. An income statement for the first quarter of 2020 is presented below:
|
Sales |
|
800,000 |
|
Cost of Goods Sold |
|
560,000 |
|
Gross Margin |
|
240,000 |
|
Less: Operating Expenses |
|
|
|
Selling Expenses |
105,000 |
|
|
Administrative Expenses |
105,000 |
210,000 |
|
Net Income |
|
30,000 |
On average, a book sells for P40. Variable selling expenses are P3 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder is fixed.
- The contribution margin for the U Store for the first quarter of 2020 is?
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