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Rajendra Sharma
SALES BUDGET
Sales volume,
Selling expenses &
Net profits.
SALES BUDGET
Instrument of planning
Mechanism of control
Tactical
Planning
Budget
PLANNING/FORECASTING/BUDGETING SEQUENCE
Marketing Plan
Sales Forecasts
Sales Control
Significant Deviations From Planned
Performance Are Associated With
Poorly conceived budgets.
Business conditions may have
changed.
Managers that have done a particularly
good or bad job managing operations.
Budgetary Control
Flexible Budgets
Management by Exception
Top managements review of a budget report is
focused on differences between actual and
expected results
Top management can focus on problem areas
Top management will investigate only material
and controllable exceptions where
Responsibility Accounting
vs. Budgetary Control
Responsibility Accounting
for Profit Centers
d. Cannot be determined
PRACTICE PROBLEM
XYZ manufactures something and their average selling price is
Rs. 40/unit and variable expenses are Rs.25 per unit. In the most
recent period, they sold 20,000 units and incurred Rs 250,000 of
fixed costs.
a) Prepare a variable costing income statement
b) Calculate the contribution margin per unit.
c) Calculate the contribution margin ratio.
d) Calculate the break-even point in sales Rs.
e) Calculate the break-even point in units sold.
f) Determine the required unit sales volume for a net income of Rs.125,000.
h) Calculate the % increase in net income if sales increase by 5%.