Tempo Company's fixed budget (based on sales of 18,000 units) folllows. Fixed Budget Sales (18,000 units x $213 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation-Office equipment Insurance Office rent Income 3,834,000 432,000 774,000 486,000 232,000 144,000 270,000 282,000 252,000 222,000 232,000 508,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 16,000 units and 20,000 units.
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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