The following are the actual results for Bentler Associates for the most recent period: 77,440 units Sales volume Sales revenue Variable costs Manufacturing Marketing and administrative Contribution margin Fixed costs Manufacturing Marketing and administrative Operating profit $ 1,006,720 Required: a. Construct the master budget for the period. b. Prepare a profit variance analysis. 254,080 39,350 $ 713,290 451,820 104,250 $ 157,220 The company planned to produce and sell 88,000 units for $12.50 each. At that volume, the contribution margin would have been $776,000. Variable marketing and administrative costs are budgeted at 5 percent of sales revenue. Manufacturing fixed costs are estimated at $5 per unit at the budgeted volume of 88,000 units. Management notes, "We budget an operating profit of $2.50 per unit at the budgeted volume."

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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.