) Total Flexible budget Budget Assumptions Operating Income 800 Volume (units) 800 1,000 $525 Revenue $423,840 $ 420,000.00 $525,000 - Variable Cost $206,205 $200,483.20 $250,604 $250.60 = Contribution Margin $217,635 $ 219,516.80 $274,396 $274.40 - Fixed Cost $100,000 $ 115,000.00 $115,000 = Operating Income $117,635 $ 104,516.80 $159,396 sales activity variances $ (54,879.20) Master Budget Variances ($41,761)
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.
| 1) | Total | Flexible budget | Budget | Assumptions |
| Operating Income | 800 | |||
| Volume (units) | 800 | 1,000 | $525 | |
| Revenue | $423,840 | $ 420,000.00 | $525,000 | |
| - Variable Cost | $206,205 | $200,483.20 | $250,604 | $250.60 |
| = Contribution Margin | $217,635 | $ 219,516.80 | $274,396 | $274.40 |
| - Fixed Cost | $100,000 | $ 115,000.00 | $115,000 | |
| = Operating Income | $117,635 | $ 104,516.80 | $159,396 | |
| sales activity variances | $ (54,879.20) | |||
| Master |
($41,761) | |||
| Flex Variances | $13,118.20 |
how to find a -Production Volume Variance (Fixed
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