Ramona produces luxury collection of dolls. She is preparing her budget for the coming year. The budgeted selling price for each doll is $30 and the budgeted materials cost for each doll is 50% of selling price while the budgeted labour cost is 20% of selling price. Each doll is expected to incur direct expenses of $1 on top of the budgeted materials and labour costs. Equipment depreciation is budgeted to be $9,000 per annum and Ramona's budgeted administration expenses are $1,200 per month. Demand in September is budgeted to be 10,000 dolls with demand rising to 10,500 dolls in October and 11,025 in November. What is Ramona's budgeted gross profit for November? $86,250 $87,450 $88,200 $99,225
Ramona produces luxury collection of dolls. She is preparing her budget for the coming year. The budgeted selling price for each doll is $30 and the budgeted materials cost for each doll is 50% of selling price while the budgeted labour cost is 20% of selling price. Each doll is expected to incur direct expenses of $1 on top of the budgeted materials and labour costs. Equipment depreciation is budgeted to be $9,000 per annum and Ramona's budgeted administration expenses are $1,200 per month. Demand in September is budgeted to be 10,000 dolls with demand rising to 10,500 dolls in October and 11,025 in November. What is Ramona's budgeted gross profit for November? $86,250 $87,450 $88,200 $99,225
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
Ramona produces luxury collection of dolls. She is preparing her budget for the coming year. The budgeted selling price for each doll is $30 and the budgeted materials cost for each doll is 50% of selling price while the budgeted labour cost is 20% of selling price.
Each doll is expected to incur direct expenses of $1 on top of the budgeted materials and labour costs. Equipment depreciation is budgeted to be $9,000 per annum and Ramona's budgeted administration expenses are $1,200 per month. Demand in September is budgeted to be 10,000 dolls with demand rising to 10,500 dolls in October and 11,025 in November. What is Ramona's budgeted gross profit for November?
$86,250
$87,450
$88,200
$99,225
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