The master budget at Western Company last period called for sales of 230,000 units at $8.30 each. The costs were estimated to be $3.00 variable per unit and $220,000 fixed. During the period, actual production and actual sales were 235,000 units. The selling price was $8.40 per unit. Variable costs were $3.75 per unit. Actual fixed costs were $220,000. Required: Prepare a flexible budget for Western.
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
Required:
Prepare a flexible budget for Western.
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