WXY Corporation manufactures lambs. Here below static budget and actual results are presented; Actual Results as of Dec,31,2011 Static Budget as of Jan,01,2011 Units sold 184.000 units 180.000 units Revenues $1.840.000 $1.800.000 Variable costs $901.600 $864.000 Fixed costs $190.000 $200.000 Required: Please prepare five column income statement performance report. Discuss the advantages of using flexible budgets in detail. Describe the purpose of variance analysis and its relation to responsibility management by using examples.
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.
WXY Corporation manufactures lambs. Here below static budget and actual results are presented;
|
Actual Results as of Dec,31,2011 |
Static Budget as of Jan,01,2011 |
|
|
Units sold |
184.000 units |
180.000 units |
|
Revenues |
$1.840.000 |
$1.800.000 |
|
Variable costs |
$901.600 |
$864.000 |
|
Fixed costs |
$190.000 |
$200.000 |
Required:
- Please prepare five column income statement performance report.
- Discuss the advantages of using flexible budgets in detail. Describe the purpose of
variance analysis and its relation to responsibility management by using examples.
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