The following information was drawn from the accounting records of Ashton Company. Budgeted Actual Sales $ 9,000 $ 11,600 Cost of Goods Sold (4,600 ) (6,000 ) Gross Margin 4,400 5,600 Variable Cost (1,800 ) (2,400 ) Fixed Cost (2,100 ) (1,600 ) Net Income $ 500 $ 1,600 Based on this information Ashton Company has a Multiple Choice $1,100 favorable sales variance $1,100 unfavorable sales variance $2,600 favorable sales variance $2,600 unfavorable sales variance
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 was drawn from the accounting records of Ashton Company.
| Budgeted | Actual | |||||||
| Sales | $ | 9,000 | $ | 11,600 | ||||
| Cost of Goods Sold | (4,600 | ) | (6,000 | ) | ||||
| Gross Margin | 4,400 | 5,600 | ||||||
| Variable Cost | (1,800 | ) | (2,400 | ) | ||||
| Fixed Cost | (2,100 | ) | (1,600 | ) | ||||
| Net Income | $ | 500 | $ | 1,600 | ||||
Based on this information Ashton Company has a
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$1,100 favorable sales variance
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$1,100 unfavorable sales variance
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$2,600 favorable sales variance
-
$2,600 unfavorable sales variance
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