Skip to question [The following information applies to the questions displayed below.] Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 90,000 T-shirts: Sales $ 1,584,000 Cost of Goods Sold 931,500 Gross Profit 652,500 Operating Expenses ($100,000 is fixed) 458,200 Operating Income 194,300 Income Taxes (30% of operating income) 58,290 Net Income $ 136,010 Cost of goods sold and variable operating expenses vary directly with sales, and the income tax rate is 30% at all levels of operating income. If the concert season is slow due to poor weather, Baskin estimates that sales could fall to as low as 70,000 T-shirts. What unit cost did Baskin use in budgeting the cost of goods sold for the year? Multiple Choice $6.14 per unit $10.35 per unit $17.60 per unit Some other amount
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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[The following information applies to the questions displayed below.]
Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales
| Sales | $ | 1,584,000 | |
| Cost of Goods Sold | 931,500 | ||
| Gross Profit | 652,500 | ||
| Operating Expenses ($100,000 is fixed) | 458,200 | ||
| Operating Income | 194,300 | ||
| Income Taxes (30% of operating income) | 58,290 | ||
| Net Income | $ | 136,010 | |
Cost of goods sold and variable operating expenses vary directly with sales, and the income tax rate is 30% at all levels of operating income.
If the concert season is slow due to poor weather, Baskin estimates that sales could fall to as low as 70,000 T-shirts.
What unit cost did Baskin use in budgeting the cost of goods sold for the year?
-
$6.14 per unit
-
$10.35 per unit
-
$17.60 per unit
-
Some other amount
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