The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available: Monthly Fixed Cost Variable Cost Per Deb Sold Sales commissions $ 1.05 Shipping $ 1.55 Advertising $ 51,500 $ 0.35 Executive salaries $ 61,500 Depreciation on office equipment $ 21,500 Other $ 41,500 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the company has budgeted to sell 16,500 Debs in February, then the total budgeted fixed selling and administrative expenses for February is:
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 Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available:
| Monthly Fixed Cost | Variable Cost Per Deb Sold | |
|---|---|---|
| Sales commissions | $ 1.05 | |
| Shipping | $ 1.55 | |
| Advertising | $ 51,500 | $ 0.35 |
| Executive salaries | $ 61,500 | |
| $ 21,500 | ||
| Other | $ 41,500 |
All of these expenses (except depreciation) are paid in cash in the month they are incurred.
If the company has budgeted to sell 16,500 Debs in February, then the total budgeted fixed selling and administrative expenses for February is:
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