Prepare a flexible budgeted statement for comprehensive incomes for 40 000 units using the above information from a static budget for 30 000 units showing clearly columns disclosing information for actual, flexed and 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 has been extracted from Windhoek Manufacturers, a company that produces and sells cosmetics for the year ended 31 July 2022.
|
|
Actual |
Static budget |
Static budget |
|
Units sold |
40 000 |
30 000 |
20 000 |
|
|
|
|
|
|
|
N$ |
N$ |
N$ |
|
Revenue |
2 360 000 |
1 800 000 |
1 200 000 |
|
Cost of sales |
(1 732 000) |
(1 290 000) |
(960 000) |
|
Materials |
760 000 |
600 000 |
470 000 |
|
Labour |
632 000 |
450 000 |
300 000 |
|
Factory overhead |
340 000 |
240 000 |
190 000 |
|
Gross profit |
628 000 |
510 000 |
240 000 |
|
Period costs |
(348 800) |
(320 000) |
(290 000) |
|
Selling and distributions |
128 800 |
120 000 |
90 000 |
|
Administrative expenses |
220 000 |
200 000 |
200 000 |
|
Operating income |
279 200 |
190 000 |
(50 000) |
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1.1 |
Prepare a flexible budgeted statement for comprehensive incomes for 40 000 units using the above information from a static budget for 30 000 units showing clearly columns disclosing information for actual, flexed and variance. |
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