Reference no: EM13164296
BANNER MANUFACTURING INC.
You are well aware of the importance of budgeting in managing a business enterprise successfully. Consequently, you have decided to prepare an operating budget for the Banner Company for the year 2013.
You have already gathered valuable information about the Company through the application of regression and Linear Programming models. You know the behavior of various costs as summerized below.
OH = 100,000 + 8 per unit X + 10 per unit Y
OR
OH = 100,000 + 0.40 per DL$ X + 0.40 per DL$ Y
Sales Discount = .01 Gross Sales
AD = 0.10 gross $ sales of prior month
Bad Debt = 0.04 gross $ sales
Salaries & Commission = 100,000 + 0.04 gross $ sales
Purchasing Expense = 4000 +0.025 per DM $
Since the unit contribution margin for product Y is higher than product X
Y: (CM for X =$15.21 and CM for y=16.045 ), then
Let us use the following sales mix:
| Product x Product Y |
| Budgeted Sales 132000 216000 |
REQUIREMENT
Prepare a master budget by completing the schedules presented in appendix F.
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: You are well aware of the importance of budgeting in managing a business enterprise successfully. Consequently, you have decided to prepare an operating budget for the Banner Company for the year 2013.
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