Lionel Corporation manufactures pharmaceutical products sold through a network of sales agents in the United States and Canada. The agents are currently paid an 18% commission on sales; that percentage was used when Lionel prepared the following budgeted income statement for the fiscal year ending June 30, 2019:
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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.
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- CVP Analysis; Commissions; Ethics Lionel Corporation manufactures pharmaceutical productssold through a network of sales agents in the United States and Canada. The agents are currently paidan 18% commission on sales; that percentage was used when Lionel prepared the following budgetedincome statement for the fiscal year ending June 30, 2019:Lionel CorporationBudgeted Income StatementFor the Year Ending June 30, 2019($000 omitted)Sales $28,500Cost of goods soldVariable $12,825Fixed 3,500 16,325Gross profit $12,175Selling and administrative costsCommissions $ 5,130Fixed advertising cost 800Fixed administrative cost 2,150 8,080Operating income $ 4,095Fixed interest cost 705Income before income taxes $ 3,390Income taxes (30%) 1,017Net income $ 2,373Since the completion of the income statement, Lionel has learned that its sales agents are requiring a 5% increase in their commission rate (to 23%) for the upcoming year. As a result, Lionel’spresident has decided to investigate the…CVP Analysis; Commissions; Ethics Lionel Corporation manufactures pharmaceutical products sold through a network of sales agents in the United States and Canada. The agents are currently paid an 18% commission on sales; that percentage was used when Lionel prepared the following budgeted income statement for the fiscal year ending June 30, 2019: Lionel Corporation Budgeted Income Statement For the Year Ending June 30, 2019 ($000 omitted) Sales $28,500 Cost of goods sold Variable $12,825 Fixed 3,500 16,325 Gross profit $12,175 Selling and administrative costs Commissions $ 5,130 Fixed advertising cost 800 Fixed administrative cost 2,150 8,080 Operating income $ 4,095 Fixed interest cost 705 Income before income taxes $ 3,390 Income taxes (30%) 1,017 Net income $ 2,373 Since the completion of the income statement,…CVP Analysis; Commissions; Ethics Lionel Corporation manufactures pharmaceutical products sold through a network of sales agents in the United States and Canada. The agents are currently paid an 18% commission on sales; that percentage was used when Lionel prepared the following budgeted income statement for the fiscal year ending June 30, 2019: Lionel Corporation Budgeted Income Statement For the Year Ending June 30, 2019 ($000 omitted) Sales $28,500 Cost of goods sold Variable $12,825 Fixed 3,500 16,325 Gross profit $12,175 Selling and administrative costs Commissions $ 5,130 Fixed advertising cost 800 Fixed administrative cost 2,150 8,080 Operating income $ 4,095 Fixed interest cost 705 Income before income taxes $ 3,390 Income taxes (30%) 1,017 Net income $ 2,373 Since the completion of the income statement,…
- Lionel Corporation manufactures pharmaceutical products sold through a network of sales agents in the United States and Canada. The agents are currently paid an 18% commission on sales; that percentage was used when Lionel prepared the following budgeted income statement for the fiscal year ending June 30, 2022: Lionel Corporation Budgeted Income Statement For the Year Ending June 30, 2022 ($000 omitted) Sales $ 30,000 Cost of goods sold $ 13,500 3,600 Variable Fixed 17,100 Gross profit Selling and administrative costs $ 12,900 Commissions $ 5,400 Fixed advertising cost 900 Fixed administrative cost 2,400 8,700 Operating income $ 4,200 Fixed interest cost 750 $ 3,450 1,035 $ 2,415 Income before income taxes Income taxes (30%) Net income Since the completion of the income statement, Lionel has learned that its sales agents are requiring a 5% increase in their commission rate (to 23%) for the upcoming year. As a result, Lionel's president has decided to investigate the possibility of…The SK Industries, Ine. manufactures and sells two products, Accel Active and Accel Regular. In September 2018, SK Industries Budget Department gathered the following data in order to prepare budgets for 2019: 2019 Projected Sales Product Units Price Accel Active 45,000 s225 Accel Regular 75,000 s1s5 Expected Target Inventories Product January 1, 2019 December 31, 2019 Accel Active 9,000 12,000 Accel Regular 17,000 25,000 The following direct materials are expeceted to be used in the two products: |Material Used per Unit Direcet Material Unit Accel Active Accel Regular pound One 6 Two pound 4 2 Three pound 2 Projected data for 2019 with respect to direct materials are as follows: Direct Material Expected Purchase PriceExpected Inventories Target Inventories (January 1, 2019) December 31, 2019) One SIS 27,000 Ib 35,000 lb Two S7 30,000 lb 35,000 lb Three $4 4,000 lb 7,000 lb Projected direct labor requirements and rates for 2019 are as follows: Hours Per Unit Rate Per Hour Product Accel…Dear Bartleby, can you please help with "calculations for cost of goods sold/operating expenses occured in the following problem, for March, April, May and June, thank you. Following are the budgeted income statements for the second quarter of 2019 for SeaTech Inc.: April May June Sales $ 112,000 $ 136,000 $ 152,000 Cost of goods sold* 76,800 91,200 100,800 Gross profit $ 35,200 $ 44,800 $ 51,200 Operating expenses† 17,600 20,000 21,600 Operating income $ 17,600 $ 24,800 $ 29,600 *Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead).†Includes all period costs (i.e., selling, general, and administrative expenses).The company expects about 40% of sales to be cash transactions. Of sales on account, 65% are expected to be collected in the first month after the sale is made, and 35% are expected to be collected in the second month after sale. Depreciation,…
- 2 Arrangon Ltd. is a company that manufactures and sells a single product called Zoltar. For planning and control purposes they utilize a monthly master budget, which is developed in advance of the budget year. Their fiscal year end is September 30. A listing of the estimated ledger balances for the company's current year of September 30, 2024 is given below: Cash Accounts receivable Inventory-raw materials Inventory-finished goods Capital assets (net) $370,058 674,730 420,090 453,122 2,632,000 $4,550,000 The sales forecast consisted of these few lines: Accounts payable $719,488 Income tax payable 42,000 Capital stock Retained earnings 2.000.000 1,788,512 $4,550,000 • For the year ended September 30, 2024: 450,000 units at $42.00 each* For the year ended September 30, 2025: 475,000 units at $43.00 each . For the year ended September 30, 2026: 500,000 units at $44.00 each *Sales for the year ended September 30, 2024 are based on actual sales to date and budgeted sales for the duration…A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950The Management Accountant of Kafululu Plc has prepared the following budget information for theyear ending 31st December 2022 for product A. Annual Fixed Costs K270,000.00 Variable costs per unit K90.00 Contribution to sales ratio(C/S) 75% Annual budget units 1,500 Required:a) Calculate the contribution per unit for Product A. b) Calculate the Unit Selling Price for Product A. c) Calculate the Break Even Point for Product A. d) Calculate the margin of safety in Units and in percentage terms. e) If the Selling Price per Unit is reduced by 10%, variable cost per Unit is increased to K100.00and Fixed costs remain unchanged, calculate:i. The new Breakeven Point. ii. The total units that should be sold in order to make a profit of K450,000 in 2020.(
- Violet Sales Corp, reports the year-end information from 2019 as follows: Sales (35,500 units) $284,000 Cost of goods sold 105,000 Gross margin 179,000 Operating expenses 152,000 Operating income $27,000 Violet is developing the 2019 budget. In 2019 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. What is budgeted sales for 2019? (Round interim calculations to the nearest cent and the final answer to the nearest dollar.) Question 8 options: $335,092 $293,940 $252,788 $284,001The following data have been extracted from the budgets and standard costs of FAA Limited a company which manufactures and sells a single product, for the 1st quarter of 2021.GH¢ per unitSelling price 60Direct material 15Direct labour 10Variable production overhead 5Fixed production overhead costs are budgeted at GH¢ 700,000 per annum. Normal productionlevels are thought to be 350,000 units per annum.Selling and distribution expenses are:Fixed GH¢ 20,000 per monthVariable 5% of the sales valueAdministration costs are GH¢ 200,000 per annum.The following trends of sales and production are expected during the first quarter of 2021UnitsProduction 80,000Sales 70,000There were no opening inventories.REQUIRED:a) Prepare the absorption costing and marginal costing income statements for 1st quarter, 2021b) Reconcile the profits in (a) above3c) State two (2) differences between absorption costing and marginal costing approachesd) What is the meaning of slack under limiting factor analysis?Projected operating income for August 2021 must be Hen Yu presented these data for August 2021 operations of Ga Ling Co.: a. Sales are budgeted at P300,000. All sales are credit sales and a provision for doubtful accounts is made monthly at 3% of sales. b. Merchandise inventory was P70,000 at Jluly 2021 and an increase of P10,000 is planned for the month. C. All merchandise is marked up to sell at invoice cost plus 50%. d. Estimated cash disbursements for operating expenses for August 2021 is P40,000. e. Depreciation for the month is projected at P5,000. P46,000 P55,000 O P56,000 O P86,000