Question 26 ACME Corporation produces scarves for all occasions in a variety of designer colours. 2022 Master budget data is as follows: Quarter 4 (Jan - Mar) (Apr Jun) (Jul - Sep) (Oct- Dec) Total Sales (units) 15,000 18,000 21,000 24,000 78,000 Unit Price $100 $100 $100 $100 Production (units) 18,000 21,600 25,200 28,800 93,600 Raw material required per unit (yards) 1.5 1.5 1.5 1.5 Raw material price per yard $20 $20 $20 $20 Direct labour hours per unit 21 Direct labour rate $20 $20 $20 $20 Manufacturing overhead allocations per unit $10 $10 $10 $10 Selling, general and administrative expenses $195,000 $195,000 $195,000 $195,000 $780,000 Required: For the First (1st) quarter of 2022 a) Calculate ACME Corporation's cost of goods sold please show your calculations. b) Prepare ACME Corporation's budgeted multi-step income statement; ignore interest and taxes.
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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