Rawlings Company prepared the following budget information for the coming year: Product A Product B $85,714 $1,000,000 25,714 $60,000 Sales Variable expenses Contribution margin Fixed expense Operating income 800,000 $200,000 Required: Total Product C $177,777 $1,263,491 97,777 923,491 $80,000 $340,000 255,000 $85,000 The budget assumes the sale of 20,000 units of A, 100,000 units of B, and 80,000 units of C. a) What is the company's break-even point given the sales mix above? b) If the budgeted sales mix is maintained, what is the total contribution margin and operating income if 300,000 units are sold?
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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