wing has been extracted from the financial records of ATF Limited: Annual budgeted capacity of the plant 40,000 units Production during the year 35,000 units Opening finished goods stock 3,000 units Closing finished goods stock 1,500 units Fixed production overheads
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.
Concept explainers
The following has been extracted from the financial records of ATF Limited:
Annual budgeted capacity of the plant 40,000 units
Production during the year 35,000 units
Opening finished goods stock 3,000 units
Closing finished goods stock 1,500 units
Fixed production
Fixed selling overheads for the year K 200,000
Selling price per unit K 200
Direct material cost per unit K 70
Direct labour cost per unit K 35
Variable production overheads per unit K 30
Variable selling overheads per unit K5
Required:
Prepare profit statement for the year, under marginal costing
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