The International Company makes and sells only one product, Product SW. The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available: VC/unit sold Sales commissions P0.70 Shipping 1.10 Advertising 0.20 Other 2.5 Fc per month Executive salaries, 34,000 Depreciation on office equipment-, 11,000 Other, 19,000 Advertising, 14,000 If the company has budgeted to sell 20,000 units of Product SW in October then the total budgeted variable selling and administrative expenses for October will be: a.P45,000 b.P56,250 c.P40,000 d.P78,000
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.
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The International Company makes and sells only one product, Product SW. The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:
VC/unit sold
Sales commissions P0.70
Shipping 1.10
Advertising 0.20
Other 2.5
Fc per month
Executive salaries, 34,000
Depreciation on office equipment-, 11,000
Other, 19,000
Advertising, 14,000
If the company has budgeted to sell 20,000 units of Product SW in October then the total budgeted variable selling and administrative expenses for October will be:
a.P45,000
b.P56,250
c.P40,000
d.P78,000
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