RUCKER COMPANY Budgeted Income Statement For the Year Ended December 31, 2019 Unit Sales 1,300 Sales Revenue (5400 per unit) $ 520,000 Cost of Goods Sold (45% of sales) 234,000 Gross Profit 286,000 Selling and Administrative Expenses (10% of sales) 52,000 Operating Income $ 234,000
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.
Using sensitivity analysis
Rucker Company prepared the following
Requirements
- Prepare a budgeted income statement with columns for 700 units, 1,300 units, and 1,700 units sold.
- How might managers use this type of budgeted income statement?
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