company has three shops (R, S and T) to which the following budgeted information relates: Sixty percent
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.
A company has three shops (R, S and T) to which the following budgeted information relates:
Sixty percent of the total fixed costs are general company overheads. These are apportioned to the shops on the basis of sales value. The other fixed costs are specific to each shop and are avoidable if the shop closes down.
If shop S closed down and the sales of the other two shops remained unchanged, what would be the revised budgeted profit for the company?
(a) £50 000
(b) £60 000
(c) £70 000
(d) £90 000
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