St. Louis Cardinals has been producing batting gloves for the past year. They have excess capacity. The following budget has been prepared for next year. Units to be produced & sold Total sales Manufacturing variable costs Manufacturing fixed costs $ $ $ 500 Selling variable costs Administrative fixed costs 25,000 16,000 Administrative variable costs 1,600 Selling fixed costs $ $ $ $ 2,000 4,000 1,000 1,500
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
St. Louis Cardinals has been producing batting gloves for the past year. They have excess capacity.
The following budget has been prepared for next year.
Units to be produced & sold
Total sales
Manufacturing variable costs
Manufacturing fixed costs
$
$
$
500
Selling variable costs
25,000 Administrative fixed costs
16,000 Administrative variable costs
1,600 Selling fixed costs
$
$
$
$
2,000
4,000
1,000
1,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fea6bde4e-c725-4e00-a32f-5e39c02069ee%2F688abc43-6f9c-40a6-a270-63fe549e11b0%2Fiacp6fh_processed.jpeg&w=3840&q=75)
![Required:
Compute the effect on net income of accepting a special order.
The order would be for:
200 units
Selling price
40 per unit
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fea6bde4e-c725-4e00-a32f-5e39c02069ee%2F688abc43-6f9c-40a6-a270-63fe549e11b0%2Ffc4b7a_processed.png&w=3840&q=75)
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