produces two products, A and Z. In the year ending 30 April 2020, it produced 6,000 A and 12,500 Z and incurred costs of $1,850,000 The costs incurred are such that 30% are variable. 60% of these variable costs vary with the number of Z produced, with the remainder varying with the output of A. The budget for the three months to 31 October 2020 is being prepared using an incremental approach based on the following: • All costs will be 6% higher than the average paid in the year ended 30 April 2020. • Efficiency levels will be unchanged. • Expected output: A 1,350 units 6,890 units Instructions: What is the budgeted cost for the output of A (to the nearest $100) for the 3 months ending 31 October 2020?
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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