The following information was drawn from the accounting records of Smith Company Static Budget Flexible Budget Actual Results Sales $ 17,500 $ 27,000 $ 30,700 Cost of Goods Sold (7,500 ) (10,200 ) (7,650 ) Gross Margin 10,000 16,800 23,050 Variable Cost (3,500 ) (4,650 ) (6,350 ) Fixed Cost (2,500 ) (2,500 ) (2,800 ) Net Income $ 4,000 $ 9,650 $ 13,900 Based on this information the Multiple Choice sales price flexible budget variance is a $13,200 unfavorable variance. sales price flexible budget variance is a $3,700 favorable variance. sales price flexible budget variance is a $13,200 favorable variance. sales price flexible budget variance is a $9,500 favorable variance.
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 was drawn from the accounting records of Smith Company
| Static Budget | Flexible Budget | Actual Results | ||||||||||||||||
| Sales | $ | 17,500 | $ | 27,000 | $ | 30,700 | ||||||||||||
| Cost of Goods Sold | (7,500 | ) | (10,200 | ) | (7,650 | ) | ||||||||||||
| Gross Margin | 10,000 | 16,800 | 23,050 | |||||||||||||||
| Variable Cost | (3,500 | ) | (4,650 | ) | (6,350 | ) | ||||||||||||
| Fixed Cost | (2,500 | ) | (2,500 | ) | (2,800 | ) | ||||||||||||
| Net Income | $ | 4,000 | $ | 9,650 | $ | 13,900 | ||||||||||||
Based on this information the
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sales price flexible
budget variance is a $13,200 unfavorable variance. -
sales price flexible budget variance is a $3,700 favorable variance.
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sales price flexible budget variance is a $13,200 favorable variance.
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sales price flexible budget variance is a $9,500 favorable variance.
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