All categories

2 years ago

A summary budget, one that contains the combined information of the flexible and operating budgets and is compiled

Business

1 answer:

Illusion [34]2 years ago

8 0

Answer:

master

Explanation:

A master budget is an integration of all other functional budgets such as sales, purchases, marketing, and production. It is prepared when all the other budgets have been completed. The master budget is a summary budget that indicates the planned activities of the business for the coming period.

Master budgets have to be approved by the top management before implementation. A Master Budget shows the projected operating profit of the company for the coming financial period. It also portrays how the balance sheet will be at the close of the period.

You might be interested in

We are evaluating a project that costs $644,000, has an eight-year life, and has no salvage value. Assume that depreciation is s

AleksandrR [38]

Solution :

a).

Particulars Details

Selling price per unit 37

Less : variable cost per unit -21

Margin per unit 16

No. of units sold per unit 70,000

Gross margin 11,20,000

Less : fixed cost - 7,25,000

Profit before depreciation and tax 3,95,000

Less : depreciation -80,500

Profit before tax 3,14,500

Less : Tax -1,10,075

Net profit per year 2,04,425

Project Cost 6,44,000

Accounting breakeven point in years 3.15

b).

Calculating the base Cash - Cash flow and NPV

Particulars Amount

Net profit per year 2,04,425

Add : depreciation 80,500

Base Cash cashflow 2,84,925

Required rate of return 15%

Present value of base cash cash flow 12,78,550

received in 8 years.

Project cost -6,44,000

NPV 6,34,550

The present value of base cash cash flow received in 8 years is calculated as Present value of annuity received at the end of each year $ 2,84,925 at the rate of interest 15% for a period of 8 years.

The sensitivity of the NPV to 500 units decrease in projected sales :

Particulars Details

Selling price per unit 37

Less : variable cost per unit -21

Margin per unit 16

Number of units sold per year 69,500

Gross margin 11,12,000

Less : fixed cost -7,25,000

Profit before depreciation and tax 3,87,000

Less : depreciation -80,500

Profit before tax 3,06,500

Less : tax -1,07,275

Net profit per year 1,99,225

Add : depreciation 80,500

Base Cash cashflow 2,79,725

Required rate of return 15%

Present value of base cash cash flow 12,55,216

received in 8 years.

Project cost -6,44,000

NPV 6,11,216

Original NPV 6,34,550

Sensitive NPV -23,334

c).

Particulars Details

Selling price per unit 37

Less : variable cost per unit -20

Margin per unit 17

No. of units sold per year 70,000

Gross Margin 11,90,000

Less : fixed cost -7,25,000

Profit before depreciation and tax 4,65,000

Less : Depreciation -80,500

Profit before tax 3,84,500

Less : tax -1,34,575

Net profit per year 2,49925

Add : depreciation 80,500

Operating cash flow 3,30,425

Original operating cashflow 2,84,925

Sensitivity of OCF 45,500

7 0

2 years ago

Timmy Company's comparative balance sheet at January 31, 2017, and 2016. reports the following (in millions):

Irina-Kira [14]

Answer:

The Accounting Equation states that;

Assets = Liabilities + Equity

Equity as at 2016 = Assets - Liabilities

= 50 - 13

= $37 million

Equity as at 2017 = Assets - Liabilities

= 77 - 18

= $59 million

1. Timmy issued $13 million of stock and declared no dividends.

<em>The Net Income ( loss) will be the figure that gives the Statement of Equity a figure of $59 million.</em>

Net Income = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016 - Issuance of stock

= 59 - 37 - 13

= $9 million

Total stockholders' equity, January 31, 2016 ................ 37

Add: Issuance of stock ......................................................... 13

Net income ......................................................................9

Less: Dividends declared......................................................0

Net loss.......................................................................................0

Total stockholders' equity, January 31, 2017...................59

2. Timmy issued no stock but declared dividends of $17 million.

Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016 + Dividends Declared

= 59 - 37 + 17

= $39 million

Total stockholders' equity, January 31, 2016 ................ 37

Add: Issuance of stock ......................................................... 0

Net income ......................................................................39

Less: Dividends declared......................................................(17)

Net loss.......................................................................................0

Total stockholders' equity, January 31, 2017...................59

3. Timmy issued $20 million of stock and declared dividends of $27 million.

Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016 + Dividends Declared - Issuance of stock

= 59 - 37 + 27 - 20

= $29 million

Total stockholders' equity, January 31, 2016 ................ 37

Add: Issuance of stock ......................................................... 20

Net income ......................................................................29

Less: Dividends declared......................................................(27)

Net loss.......................................................................................0

Total stockholders' equity, January 31, 2017...................59

7 0

3 years ago

In each of the following scenarios, explain and categorize the cost of inflation.a) Because inflation has risen, the J.Crew clot

Kazeer [188]

Answer:

Consider the following explanation

Explanation:

a) J. Crew is issuing its catalogs monthly in response to inflation. This will incur cost and it is known as 'Menu Cost'.

b) Grandpa has bought annuity which has promised $10,000 a year for the rest of his life. However, higher than expected inflation means grandpa has lesser purchasing power. This is loss of purchasing power and also 'redistribution cost'. In higher inflation borrower tends to get benefit. Here insurance company is at the gain.

c) Maria is witnessing loss of purchasing power because of hyper inflation. In such scenario, cost keeps rising and product's price could be higher a few hours later. This was witnessed in Germany as well as in Zimbabwe. People run to the stores as soon as they get cash or salary. It is known as 'shoe leather cost'. People make frequent trips to banks or stores but do not keep cash in fear of losing value.

d) Gita actually earned only 5% on her portfolio but as her income is in taxable bracket so she has to pay 20% tax. Her income from portfolio not even compensated inflation. This is a redistribution cost and also known as fiscal drag. More people fall into bracket because higher nominal income but real income is neglected which makes people worse off.

e) Father thinks that son is earning far more than him but inflation over the period of time erodes purchasing power and it could be possible that current income might be lower, same or higher comparing to inflation data. However, if it is lower then it is obviously loss of purchasing power.

5 0

3 years ago

The audit Mr. Chu is working on for a technology company is regulated. What does this mean?

Aliun [14]

It means that the technology company will use the audit results to analyze risks. Thus option A is correct.

<h3>What is Audit ?</h3>

Audit refers to the checking of financial records of the company in order to ensure that the records are systematic and accurate. It is very helpful for the outsiders such as creditors, shareholders, government agencies etc as it provides the accurate information about transactions.

Mr. Chu will analyse the financial statements of the technology company an conclude about the risk involved in the company. Thus it helps in analyzing the risk. Therefore, option A is correct.

Learn more about auditing here:

brainly.com/question/14652228

#SPJ1

7 0

1 year ago

Which of the following is not considered when you are calculating cost of quality?

enyata [817]

Answer: The following is not considered when you are calculating cost of quality:<u><em> The cost of gaining formal acceptance of project deliverable.</em></u>

Cost of Quality contains all the costs that are both internal and external to the system; whereas, the Cost of Quality include the conformance, considering any costs connected with both appraisal and interference.

Cost of Quality is calculated as :

Cost of Quality = Cost of Poor Quality + Cost of Good Quality

4 0

3 years ago