Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,300 pounds of oysters in August. The company's flexible budget for August appears below: Actual pounds (q) Revenue ($4.15g) Expenses: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Packing supplies ($0.35q) Oyster bed maintenance ($3,400) Wages and salaries ($2,400 + $0.40q) Shipping ($0.55q) Utilities ($1,240) Other ($470+ $0.019) Total expenses Net operating income. The actual results for August were as follows: Actual pounds Revenue Expenses: Quilcene Oysteria Income Statement For the Month Ended August 31 Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other Total expenses Net operating income 7,300 $ 30,295 2,555 3,400 5,320 4,015 1,240 543 17,073 $ 13,222 7,300 $ 27,000 2,725 3,260 5,730 3,745 1,050 1, 163 17,673 $9,327
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.
Revenue and spending variance :— It is the difference between actual results and flexible budget. unfavorable revenue variance occurs when actual revenue is less than flexible budget revenue. Favorable revenue variance occurs when actual revenue is more than flexible budget revenue. Favorable expense variance occurs when actual expense is less than flexible budget expense. unfavorable expense variance occurs when actual expense is more than flexible budget expense.
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