Tucker makes and sells three products as follows: T K R £ £ £ Selling price 800 900 700 Material 215 250 180 Labour 110 120 95 Variable overheads 245 242.50 195 Fixed overheads 200 250 200 Profit 30 37.50 30 Budgeted sales 80 80 70 Total fixed costs have been absorbed on a unit basis according to the budgeted production. Calculate the break-even in both units and sales revenue and the margin of safety if Tucker sells its three products in the same ratio as the budgeted sales.
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.
Tucker
Tucker makes and sells three products as follows:
|
|
T |
K |
R |
|
|
£ |
£ |
£ |
|
Selling price |
800 |
900 |
700 |
|
Material |
215 |
250 |
180 |
|
Labour |
110 |
120 |
95 |
|
Variable overheads |
245 |
242.50 |
195 |
|
Fixed overheads |
200 |
250 |
200 |
|
Profit |
30 |
37.50 |
30 |
|
|
|
|
|
|
Budgeted sales |
80 |
80 |
70 |
Total fixed costs have been absorbed on a unit basis according to the budgeted production.
Calculate the break-even in both units and sales revenue and the margin of safety if Tucker sells its three products in the same ratio as the budgeted sales.
Determine the production plan to break even with the least number of items.
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