The following information pertains to the month of August. As part of the budgeting process, Shelley Company developed the following static budget for August. Shelley Company is in the process of preparing the flexible budget and understanding the results. Sales volume (in units) Sales revenues Variable costs Contribution margin Fixed costs Operating profit $158,000 The flexible budget will report O $750,000 $158,000 $750,000 O $900,000 O $780,000 Actual Results 40,000 O $480,000 $1,000,000 780,000 220,000 158,000 $62,000 Flexible Budget $ LALA $ $ LALA for variable costs. TUI Valladie costS. Static Budget 50,000 $1,200,000 1,125,000 75,000 70,000 $5,000
The following information pertains to the month of August. As part of the budgeting process, Shelley Company developed the following static budget for August. Shelley Company is in the process of preparing the flexible budget and understanding the results. Sales volume (in units) Sales revenues Variable costs Contribution margin Fixed costs Operating profit $158,000 The flexible budget will report O $750,000 $158,000 $750,000 O $900,000 O $780,000 Actual Results 40,000 O $480,000 $1,000,000 780,000 220,000 158,000 $62,000 Flexible Budget $ LALA $ $ LALA for variable costs. TUI Valladie costS. Static Budget 50,000 $1,200,000 1,125,000 75,000 70,000 $5,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
3
Transcribed Image Text:The following information pertains to the month of August. As part of the
budgeting process, Shelley Company developed the following static
budget for August. Shelley Company is in the process of preparing the
flexible budget and understanding the results.
4
Sales volume (in units)
Sales revenues
Variable costs
Contribution margin
Fixed costs
Operating profit
$158,000
The flexible budget will report
$750,000
$158,000
$750,000
O$900,000
Actual
Results
40,000
O $780,000
O $480,000
Flexible
Budget
$1,000,000 $
780,000
$_
220,000
158,000
$62,000
LA
SALA
=====
for variable costs.
TUI Valladie costs.
Static
Budget
50,000
$1,200,000
1,125,000
75,000
70,000
$5,000
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