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FINC 577 Chapter 9 Notes Outline

Fixed variable distinguishes between fixed and

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Unformatted text preview: s. fixed variable Distinguishes between fixed and variable costs. Example – Hayes Company Fixed cost amounts are assumed. Expected variable costs per unit sold (f (from sales budget): Sales commissions: $3.00 Freight-out: $1.00 Chapter 9-27 Operating Operating Budgets: Selling and Administrative Illustration 9-11 Chapter 9-28 Operating Operating Budgets: Budgeted Income Statement Important ___________ of the operating budgets. ___________ Indicates ______________________of operations. ______________________ Provides a basis for evaluating company basis performance. Prepared from the operating budgets: Sales Budget, Production Budget, Direct Materials Budget, Direct Labor Budget, Manufacturing Overhead Budget, and Selling and Administrative Expense Budget. Chapter 9-29 The Master Budget - Components Chapter 9-30 Operating Operating Budgets: Budgeted Income Statement Example – Hayes Company To find cost of goods sold: First, determine the unit cost of one Kitchen-mate: Kitchen- Second, determine Cost of Goods Sold by multiplying units sold times unit cost: 15,000 units × $44 = $660,000 Chapter 9-31 Operating Budgets: Budgeted Income Statement Additional estimated data for budgeted income statement: Interest Expense: $100 Income Taxes: $12,000 Chapter 9-32 Financial Financial Budgets: Cash Budget Shows anticipated cash flows. anticipated cash Often Often considered to be the __________________ in in preparing financial budgets. Con...
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