A Static Budget

Those are just a few examples of the many expenses that come with college. Which is why financial aid, scholarships, and smart money

Assume that next year management wants the company to earn a minimum profit of $162,000. How many units be sold to meet this target profit figure? [3 points]

70 people), with each seat generating a net revenue (revenues minus costs of operation) of $35. Aggregate

Breakfast =$3, Gas+ $24, Lunch= $8, Pharmacy expenses = $12, Dinner +$10. Total = $67

Total Sales Dollars (for covering each incremental dollar of advertising) = $200,000 / $150,000 = $1.33

The next area that I chose to drastically reduce was the school funding of field trips. When I first looked at the spreadsheet, I was surprised to see that the district budget still allocated funds for field trips, as

First you have to calculate the Gross Profit: Gross Profit = = = Sales – Cost of Goods Sold $650,000 - $485,000 (calculated in Part A) $165,000

A budget is an instrument used to help managers ensure that the resources used effectively and proficiently toward the goals of an organization. A budget projection can be made on a yearly base depending on previous year or existing one. They can further be broken down quarterly or monthly depending on it use. Generating a budget is complex undertaking, and for a budget to be effective the organization ought to follow it strictly. However, no matter how closely a business follows their guidelines there will always be some form of variances. The organization should expect a few variances and be able to work these discrepancies in any budget

This is quite similar to what Mark calculated in average method. However, it is more important to look at the breakeven point for each program. Currently, Infants and Toddlers Program has not only excelled its breakeven point by 7 students, but also reached its accommodation capacity. The enrollment of Preschool Program was already at breakeven, and it requires an additional $22,000 for teacher’s salary to increase 10 students. However, After-School Program needs another 6 students to have breakeven, and also an additional $25,000 is needed to add 15 more students. Table 2 uses this adjusted information to calculate a new breakeven point and surplus.

A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.

The revenue is $600,600*1.2= $720,720. The variable cost changes as sales increases and fixed cost stays the same, the gross profit is $175,500. After tax, the net income is $100,557.

Static Budget is a budget that never changes, even if the activity level changes. However, the Flexible Budget changes based on actual activity. The flexible budget is more accurate than the static budget because budget amounts change for changes in activity.

Budgeting is crucial in the well-being of a company especially the financial health status of a company. In fact, no professionally managed firm would fail to budget, since the budget establishes what is authorized, how to plan for purchasing contracts and hiring, and indicates how much financing is needed to support planned activity. It is routine for a company to budget for its expenses. Expense budgets act as a guideline of how much revenue a company would require keeping the activities running. It is used to set the company’s targets for a certain period.

then create a formula similar to this .53 = 530,000 - 1,000,000 as you can see, Dean 's operating income is $530,000 (Net sales – all operating expenses). According to the formula used, Dean’s operating margin is .53. By taking that away from 110 this means that 57 cents on every dollar of sales are used to pay for variable costs. Only 53 cents remains to cover all non-operating expenses or fixed costs.

This paper will describe the differences between static and flexible budgets. Budgeting is a key component of financial management in any business. The most traditional form of budget is the static budget, which is one "that incorporates values about inputs and outputs that are conceived before the period in question begins" (Investopedia, 2012). This concept will be contrasted with a flexible budget. This technique allows for the values of inputs and outputs to be changed at any point, or at multiple points, during the period in question. The company would normally make such a change whenever it is realized that the change is needed. A new price from a supplier, for example, could be reflected immediately in a flexible budget, rather than at the end of the period. This and other differences between the two types of budget will be outlined in the course of this paper. The first section will explain the relationship between fixed and variable costs in a flexible budget. The second section will discuss the differences between static and flexible budgets. The third section will explain how flexible budgets can assist with cost-volume-profit (CVP) analysis.