Fairfield Company management has budgeted the following amounts for its next fiscal year: selling price per unit $45.00 per unit variable expense per unit $25.00 per unit Total fixed expenses $832, 500 Fairfield Company’s goal for the month is to earn a target operating income of $285,000. How many units must be sold to achieve this goal?
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.
Fairfield Company management has budgeted the following amounts for its next fiscal year:
| selling price per unit | $45.00 per unit |
| variable expense per unit | $25.00 per unit |
| Total fixed expenses | $832, 500 |
Fairfield Company’s goal for the month is to earn a target operating income of $285,000. How many units must be sold to achieve this goal?
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If Fairfield Company can reduce fixed expenses by $22,500, breakeven sales in units will
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