YZ Co. makes and sells product AB. The company provides the following data about its selling and administrative expenses budget: Monthly Fixed Cost Variable cost per unit sold Sales Commissions P0.75 Shipping P1.30 Advertising P30,000 P0.20 Executive salaries P25,000 Depreciation P15,000 Other expenses P7
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.
XYZ Co. makes and sells product AB. The company provides the following data about its selling and administrative expenses budget:
| Monthly Fixed Cost | Variable cost per unit sold | |
| Sales Commissions | P0.75 | |
| Shipping | P1.30 | |
| Advertising | P30,000 | P0.20 |
| Executive salaries | P25,000 | |
| P15,000 | ||
| Other expenses | P7,000 |
All expenses except depreciation of office equipment are paid in cash in the month they are incurred. The company has budgeted to sell 18,000 units of product AB in August 2021.
Questions:
1. How much is the total budgeted selling and administrative expenses for August 2021?
2. Assuming the cash disbursements for selling and administrative expenses total P116,000, then how many units of product AB does the company plan to sell?
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