ABC Furniture manufactures tables. Recently a supplier has offered the tables of the same quality @ £14 each with an assurance of continued supply. The following is the budget for 4000 units prepared for the quarter ending 30 September 2021: £ Materials 16,000 Labour 25,000 Overhead (production) Variable 16,000 Fixed 14,000 Distribution Costs Variable 6,000 Fixed 7,500 Admin Costs Variable 5000 Fixed 12500 a) Should ABC furniture make or buy the tables if resources are not used elsewhere when not employed in the manufacture of tables (i.e., spare)? Choose one from the following: A. Make B. Buy C. Need more information to decide D. Cease operation
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.
-
ABC Furniture manufactures tables. Recently a supplier has offered the tables of the same quality @ £14 each with an assurance of continued supply. The following is the budget for 4000 units prepared for the quarter ending 30 September 2021:
£
Materials
16,000
Labour
25,000
Overhead (production)Variable
16,000
Fixed
14,000
Distribution Costs
Variable
6,000
Fixed
7,500
Admin Costs
Variable
5000
Fixed
12500
a) Should ABC furniture make or buy the tables if resources are not used elsewhere when not employed in the manufacture of tables (i.e., spare)?
Choose one from the following:
A. Make
B. Buy
C. Need more information to decide
D. Cease operation
Step by step
Solved in 2 steps with 1 images
