Result Flexible budget variance Flexible budget Sales volume variance Static budget Static budget variance Unit sold 150 a) b) c) 120 d) Revenues 1800 e) f) g) 2160 h) Variable cost 1050 i)
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.
The following information is available for Top Company:
|
|
Actual Result |
Flexible |
Flexible budget |
Sales volume variance |
Static budget |
Static budget variance |
|
Unit sold |
150 |
a) |
b) |
c) |
120 |
d) |
|
Revenues |
1800 |
e) |
f) |
g) |
2160 |
h) |
|
Variable cost |
1050 |
i) |
j) |
k) |
1500 |
l) |
|
Contribution margin |
750 |
m) |
n) |
o) |
660 |
p) |
|
Fixed cost |
350 |
q) |
r) |
s) |
300 |
t) |
|
Operating income |
400 |
u) |
v) |
w) |
360 |
x) |
Required: Find the missing item (a) through (x). For the variances indicate whether it is favorable (F) or unfavorable (U).
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