The following information was extracted from the budget for the month ended 31 August 2022: Sales 10 000 units at R200 per unit Direct materials cost per unit R50 Direct labour cost per unit R34 Variable manufacturing overhead costs per unit R24 Variable selling costs per unit R12 Fixed manufacturing overhead cost R230 000 Fixed selling and administrative costs R170 000 3.1 The total Marginal Income and Net Profit/Loss if all 10 000 units are sold. 3.2 Break even value by using the marginal income ratio 3.3 Margin of safety (in units)
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 extracted from the budget for the month ended 31 August 2022:
Sales 10 000 units at R200 per unit
Direct materials cost per unit R50
Direct labour cost per unit R34
Variable
Variable selling costs per unit R12
Fixed manufacturing overhead cost R230 000
Fixed selling and administrative costs R170 000
3.1 The total Marginal Income and Net
3.2 Break even value by using the marginal income ratio
3.3 Margin of safety (in units)
3.4 The sales volume required to earn a net profit of R560 000
3.5 The total Marginal Income and Net Profit/Loss if all the manufacturing costs increase by 10%.
Step by step
Solved in 3 steps
