Echo Amplifiers prepared the following sales budget for the first quarter of 2018: Jan. Feb. Mar. Units 1,000 1,300 1,600 Sales price $100 $100 $100 Budgeted sales $100,000 $130,000 $160,000 It also has this additional information related to its expenses: Direct material per unit $1.50 Direct labor per unit 2 Variable manufacturing overhead per hour 0.40 Fixed manufacturing overhead per month 3,000 Sales commissions per unit 15 Sales salaries per month 5,100 Delivery expense per unit 0.40 Factory utilities per month 5,000 Administrative salaries per month 19,000 Marketing expenses per month 9,000 Insurance expense per month 11,000 Depreciation expense per month 8,000 Prepare a sales and administrative expense budget for each month in the quarter ending March 31, 2018. Enter all amounts as positive numbers.
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.
Echo Amplifiers prepared the following sales budget for the first quarter of 2018:
| Jan. | Feb. | Mar. | |
| Units | 1,000 | 1,300 | 1,600 |
| Sales price | $100 | $100 | $100 |
| Budgeted sales | $100,000 | $130,000 | $160,000 |
It also has this additional information related to its expenses:
| Direct material per unit | $1.50 |
| Direct labor per unit | 2 |
| Variable manufacturing overhead per hour | 0.40 |
| Fixed manufacturing overhead per month | 3,000 |
| Sales commissions per unit | 15 |
| Sales salaries per month | 5,100 |
| Delivery expense per unit | 0.40 |
| Factory utilities per month | 5,000 |
| Administrative salaries per month | 19,000 |
| Marketing expenses per month | 9,000 |
| Insurance expense per month | 11,000 |
| 8,000 |
Prepare a sales and administrative expense budget for each month in the quarter ending March 31, 2018. Enter all amounts as positive numbers.
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