Princess Ariel Company manufactures and sells two types of beach towels, standard and deluxe. The company budgets the following sales and variable costs for each towel for the upcoming year: Standard Deluxe Sales............................................... $450,000 $50,000 Variable expenses ......................... $360,000 $20,000 Princess Ariel also budgets $57,600 in company-wide fixed expenses for the year. Princess Ariel’s actual total sales for the year were $500,000; however, sales of Standard towels were $300,000 and sales of Deluxe towels were $200,000. Variable and fixed costs were in line with the budget. Princess Ariel’s actual operating income for the year was: Answer choices $74,800 $62,400 $122,400 $120,000
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.
Princess Ariel Company manufactures and sells two types of beach towels, standard and deluxe. The company budgets the following sales and variable costs for each towel for the upcoming year:
|
|
|
Standard |
Deluxe |
|
|
Sales............................................... |
$450,000 |
$50,000 |
|
|
Variable expenses ......................... |
$360,000 |
$20,000 |
Princess Ariel also budgets $57,600 in company-wide fixed expenses for the year.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
