rgoNow sells its main product, ergonomic mouse pads, for $12 each. Its variable cost is $5.40 per pad. Fixed costs are $200,000 per month for volumes up to 65,000 pads. Above 65,000 pads, monthly fixed costs are $260,000. Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and operating income for volume levels of 35,000, 45,000, and 75,000 pads. ErgoNow Flexible Budget Budget Amounts Per Unit Units 35,000 45,000 75,000 (1) (2) (3) (4) (5) (1) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (2) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (3) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (4) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (5) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs
rgoNow sells its main product, ergonomic mouse pads, for $12 each. Its variable cost is $5.40 per pad. Fixed costs are $200,000 per month for volumes up to 65,000 pads. Above 65,000 pads, monthly fixed costs are $260,000. Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and operating income for volume levels of 35,000, 45,000, and 75,000 pads. ErgoNow Flexible Budget Budget Amounts Per Unit Units 35,000 45,000 75,000 (1) (2) (3) (4) (5) (1) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (2) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (3) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (4) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (5) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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
ErgoNow
sells its main product, ergonomic mouse pads, for
$12
each. Its variable cost is
$5.40
per pad. Fixed costs are
$200,000
per month for volumes up to 65,000 pads. Above 65,000 pads, monthly fixed costs are
$260,000.
Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and operating income for volume levels of
35,000,
45,000,
and
75,000
pads.|
ErgoNow
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Flexible Budget
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Budget
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Amounts
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Per Unit
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Units
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35,000
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45,000
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75,000
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(1)
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(2)
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(3)
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(4)
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(5)
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(1)
Contribution Margin
Fixed Costs
Operating Income
Sales Revenue
Variable Costs
(2)
Contribution Margin
Fixed Costs
Operating Income
Sales Revenue
Variable Costs
(3)
Contribution Margin
Fixed Costs
Operating Income
Sales Revenue
Variable Costs
(4)
Contribution Margin
Fixed Costs
Operating Income
Sales Revenue
Variable Costs
(5)
Contribution Margin
Fixed Costs
Operating Income
Sales Revenue
Variable Costs
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