Prepare a monthly flexible selling expense budget for Podism Company for sales volumes of $270,000, $350,000, and $480,000, based on the following data: Sales commissions 7% of sales Sales manager's salary $62,000 per month Advertising expense $70,000 per month Shipping expense 2% of sales Miscellaneous selling expense $2,500 per month plus 1/2% of sales Podism Company Monthly Selling Expense Budget Sales volume $270,000 $350,000 $480,000 Variable expense: Sales commissions 24,500 18,900 33,600 Shipping expense 5,400 7,000 9,600 Miscellaneous selling expense 2,400 1,350 1,750 Total variable expense 25,650 33,250 45,600 Fixed expense: Sales manager's salary 62,000 62,000 62,000 Advertising expense 70,000 70,000 70,000 Miscellaneous selling expense 2,500 2,500 2,500 Total fixed expense 134,500 134,500 134,500 Total selling expense 167,750 180,100
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.
Lets understand the basics.
Budget is prepared by management to estimate the future profit and loss.
Management prepares the master budget as well as the various budget based on the various activities. i.e. Sales budget, production budget, direct material budget etc.
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