The following data have been extracted from the budgets of Kelvin Ltd,a company that manufacture and sells a single product $per unit Selling price Direct material cost Direct wages Variable overhead Fixed overhead 45 10 4 2.50 1.50 Fixed production overhead costs are budgeted at $400,000 per annum. Normal production levels are expected to be 200,000 units per annum. Actual Fixed Production overheads are $120,000 Budgeted administration costs are $120,000 per annum. The following pattern of sales and production is expected during 2003: Sales (units) Production (units) 60,000 70,000 You are required a. To prepare budgeted profit statements for the year using (i) (ii) Marginal Costing Absorption Costing b. To reconcile the profits for the year
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.
The following data have been extracted from the budgets of Kelvin Ltd,a company that manufacture and sells a single product $per unit Selling price Direct material cost Direct wages Variable overhead Fixed overhead 45 10 4 2.50 1.50 Fixed production overhead costs are budgeted at $400,000 per annum. Normal production levels are expected to be 200,000 units per annum. Actual Fixed Production
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