Q5: Flexible budget for a product as prepare by Anchor Ltd, is given below: Sales – unit 10,000 15,000 20,000 Rs. Rs. Rs. Sales 800,000 1,200,000 1,600,000 Manufacturing cost: Variable 300,000 450,000 600,000 Fixed 200,000 200,000 200,000 Total manufacturing cost 500,000 650,000 800,000 Marketing and other expenses: Variable 200,000 300,000 400,000 Fixed 160,000 160,000 160,000 Total Marketing and other exp 360,000 460,000 560,000 Operating income / (los (60,000) 90,000 240,000 Additional information: The budget of 20,000 units will be used for allocating the fixed manufacturing cost to units of product. At the end of first six months, 12,000 units have been completed and 6,000 units have been sold @ Rs.80 per unit. All fixed costs are budgeted and incurred uniformly throughout the year and all costs incurred, coincide with budget. The over or under applied fixed manufacturing cost is deferred unit the end of the year.
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.
Q5:
Flexible budget for a product as prepare by Anchor Ltd, is given below:
Sales – unit 10,000 15,000 20,000
Rs. Rs. Rs.
Sales 800,000 1,200,000 1,600,000
Variable 300,000 450,000 600,000
Fixed 200,000 200,000 200,000
Total manufacturing cost 500,000 650,000 800,000
Marketing and other expenses:
Variable 200,000 300,000 400,000
Fixed 160,000 160,000 160,000
Total Marketing and other exp 360,000 460,000 560,000
Operating income / (los (60,000) 90,000 240,000
Additional information:
- The budget of 20,000 units will be used for allocating the fixed manufacturing cost to units of product.
- At the end of first six months, 12,000 units have been completed and 6,000 units have been sold @ Rs.80 per unit.
- All fixed costs are budgeted and incurred uniformly throughout the year and all costs incurred, coincide with budget.
- The over or under applied fixed manufacturing cost is deferred unit the end of the year.
(Note: Don’t write Comma (,) Full stop (.) and any Rs. Signs in Answer just write in number (i.e. 10000, but not Rs.10,000))
REQUIRED:
Calculate the units Sold?
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