The Titan Company provides you with the following information for the current year: Revenues = $2,000,000Cost of goods sold = $750,000 (2/3 of this amount varies with the number of units produced)S&A costs = $200,000 (1/2 of this amount is fixed)Selling price = $40 per unit The company sold 50,000 units of their product in the current year. The company expects unit sales of their product to increase 20% in the next year. Based on the information above, what would be the expected increase to profit before taxes in the coming year?
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 Titan Company provides you with the following information for the current year:
Revenues = $2,000,000
Cost of goods sold = $750,000 (2/3 of this amount varies with the number of units produced)
S&A costs = $200,000 (1/2 of this amount is fixed)
Selling price = $40 per unit
The company sold 50,000 units of their product in the current year. The company expects unit sales of their product to increase 20% in the next year.
Based on the information above, what would be the expected increase to profit before taxes in the coming year?
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