SR Bikes has budgeted to make luxury branded drink bottles from recycled plastic and wants to sell them with the bikes in the next financial year. If the selling price per drink bottle is $100, the contribution margin ratio is 40% and total fixed costs are $25 000, how many drink bottles must CSR Bikes sell to achieve a desired profit of $20 000? a. 500 b. 1125 c. 625

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.