Cases of candy produced and sold Sales price Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs 1,800,000 cases 37.00 per case 20.00 per case 6,400,000 per year 2.00 per case 3,500,000 per year
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.
Setting sales prices
The Sweet Treats Company manufactures candy that is sold to food distributors. The company produces at full capacity for six months each year to meet demand during the “candy season” from Halloween through Valentine’s Day During the other six months of the year, the manufacturing facility operates at 75% of capacity. The Sweet Treats Company provides the following data for the year:
The Sweet Treats Company receives an offer to produce 13,000 cases of candy for a special event. This is a one-time opportunity during a period when the Company has excess capacity. What is the minimum sales price. The Sweet Treats Company should accept for the order? Explain Why.
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