The controller has asked a question: The static budget, at the beginning of the month, for Red Deer Company follows: Static budget: Sales volume: 2000 units; Sales price: $50.00 per unit 0 Variable costs: $14.00 per unit, Fixed costs: $25,100 per month Operating income: $46,900 Actual results, at the end of the month, follows: Actual results: Sales volume: 1900 units; Sales price: $58.00 per unit Variable costs: $16.5 per unit; Fixed costs: $34,000 per month Operating income: $44,850 Calculate the flexible budget variance for operating income O $3600 U $3600 F $1550 F O $15,200 F
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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