The following information is available for Pioneer Company: Sales price per unit is $100. November and December, sales were budgeted at 3,140 and 3,540 units, respectively. Variable costs are 12 percent of sales (6 percent commission, 3 percent advertising, 3 percent shipping). Fixed costs per month are sales salaries, $4,500; office salaries, $2,800; depreciation, $2,200; building rent, $3,100; insurance, $1,400; and utilities, $700. Required: Determine Pioneer's budgeted selling and administrative expenses for November and December.
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 information is available for Pioneer Company:
Sales price per unit is $100.
November and December, sales were budgeted at 3,140 and 3,540 units,
respectively.
Variable costs are 12 percent of sales (6 percent commission, 3 percent
advertising, 3 percent shipping).
Fixed costs per month are sales salaries, $4,500; office salaries, $2,800;
$700.
Required:
Determine Pioneer's budgeted selling and administrative expenses for November and
December.
November December
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