Task 2 (Budgeting) Aqua Safe produces water purifiers for domestic use. The production expenses for the production of 5,000 units of water purifiers in its factory is given in Table T2: Materials Labour Variable Overheads Fixed Overheads Table T2 Administrative Expenses (5% Variable) Selling Expenses (20% Fixed) Distribution Expenses (10% Fixed) Total Cost of Sales (for 5,000 units) 4200 2100 1400 900 1000 570 480 10650 You are required to prepare a flexible budget for the production of 7000 units and 14000 units of water purifiers.
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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