Required: Prepare a flexible budget for each of the three possible sales levels: 98,000, 108,000, and 118,000 units. Each toaster oven is expected to sell for $15.20.
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.
![Exercise i- Piepany rIEAIDIE Duuyeis (LUZ-CCI2)
ToasToe Inc. (TI) is a manufacturer of heating elements for toaster ovens. To improve control over operations, the president wants to
Install a flexible budgeting system, rather than the single master budget being used at present. The following data are available for
expected costs for production. The relevant range of production levels for fixed overhead costs is 75,000 to 170,000 units:
Variable costs
Hanufacturing
Administrative
Selling
Fixed costs:
Manufacturing
Administrative
$7.00/unit
$4.00/unit
$2.00/unit
$ 125,600
$ 90,000
Required:
Prepare a flexible budget for each of the three possible sales levels: 98,000, 108,000, and 118,000 units. Each toaster oven is
expected to sell for $15.20.
Required:
Prepare a flexible budget for each of the three possible sales levels: 98,000, 108,000, and 118,000 units. Each toaster oven is
expected to sell for $15.20
TOASTTOE INC.
Flexible Budget
Cost Formula
(per toaster)
Activity (toasters)
98,000
105,000
118,000
Variable costs
Total variable costs
0.00 $
Fixed costs:
Total fixed costs
Total costs
$.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6db738a6-4c01-42de-baf8-debf70260978%2Feb63d8fb-f3d3-4f8a-9108-c69a6e222879%2Fle289be_processed.jpeg&w=3840&q=75)
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