Walt Bach Company has accumulated the following budget data for the year 2019. Sales: 40000 units, unit selling price $50. Cost of one unit of finished goods: Direct materials 2 pounds at $5 per pound, direct labor 1.5 hours at $12 per hour, and manufacturing overhead $6 per direct labor hour. Inventories (raw material only): Beginning, 10000 pounds; ending, 15000 pounds. Raw materials cost: $5 per pound. Selling and administrative expenses: $200000 Income taxes: 30% of income before income taxes. Prepare a budget income statement for 2019.
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.
Walt Bach Company has accumulated the following budget data for the year 2019.
- Sales: 40000 units, unit selling price $50.
- Cost of one unit of finished goods: Direct materials 2 pounds at $5 per pound, direct labor 1.5 hours at $12 per hour, and manufacturing
overhead $6 per direct labor hour. - Inventories (raw material only): Beginning, 10000 pounds; ending, 15000 pounds.
- Raw materials cost: $5 per pound.
- Selling and administrative expenses: $200000
- Income taxes: 30% of income before income taxes.
Prepare a
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