Pumpkin Products sells its main product, designer headphones, for $13.20 each. Its variable costs are $5.20 per unit. Fixed costs amount to $224,000 per month for sales volumes up to 61,000 units. Above 61,000 units, monthly fixed costs are $263,000. Prepare a monthly flexible budget for sales volumes of 35,800, 54,600, and 69,400
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.
Pumpkin Products sells its main product, designer headphones, for $13.20 each. Its variable costs are $5.20 per unit. Fixed costs amount to $224,000 per month for sales volumes up to 61,000 units. Above 61,000 units, monthly fixed costs are $263,000.
Prepare a monthly flexible budget for sales volumes of 35,800, 54,600, and 69,400.
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