The following information is available to Arena Events Ltd who are preparing their budget for 2021: 1. The average sales price for 2021 will be £30 per ticket for an event. 2. 100% event occupancy is set at 48,000 seats (tickets) per annum 3. Event staff variable costs would be £9.50 per ticket. 4. Variable overheads would be £3.50 per ticket- these are the costs of hospitality welcome packs including a free meal and drink. 5. The relationship between semi variable costs and number of tickets sold will be consistent with that over the last 6 years: Yearly direct labour semi variable Costs (E) Tickets 2015 32,000 40,000 2016 30,000 38,000 2017 42,000 41,000 2018 39,000 39,500 2019 41,000 43,000 40,500 2020 43,200 6. Fixed costs for the 2021 year are expected to be;- Depreciation 120,000 Maintenance 12,000 Insurance Site Cleaning Office Salaries 145,000 42,000 150,000
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.
![The following information is available to Arena Events Ltd who are preparing their budget for 2021:
1. The average sales price for 2021 will be £30 per ticket for an event.
2. 100% event occupancy is set at 48,000 seats (tickets) per annum
3. Event staff variable costs would be £9,50 per ticket.
4. Variable overheads would be £3.50 per ticket- these are the costs of hospitality
welcome packs including a free meal and drink.
S. The relationship between semi variable costs and number of tickets sold
will be consistent with that over the last 6 years :
Yearly direct labour semi variable
Tickets Costs (E)
2015
32,000
40,000
30,000
42,000
39,000
2016
38,000
2017
41,000
2018
39,500
2019
41,000
40,500
2020
এ3,000
43,200
6. Fixed costs for the 2021 year are expected to be;-
Depreciation 120,000
Maintenance
12,000
Insurance
42,000
Site Cleaning 150,000
Office Salaries 145,000
Tip- to answer this question you need to:-
Prepare a flexible budget for 2021 showing the variable, semi variable, fixed overheads
and budgeted profit (loss), of Arena Events Ltd, at activity levels of 100% and 80%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F53a9342a-3958-4c5f-848a-17778d9309f0%2F1931a7dc-db71-4536-8929-5f95f7aa803d%2Fdkq69j_processed.png&w=3840&q=75)
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