Budgeting and departmental income statement.

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pnyhzf

Business Finance

MANAGERIAL ACCOUNTING

Description

a. Provide general discussion on budgeting, limitations of fixed budget and necessity of fixed budget. in details. Given values in the example are in black and the found values are in red. Add inline citation

b. Provide general discussion on departmental income statement, criteria for division of indirect costs provide inline citations, then provide an example and explain your work in details

Attached are examples I intend using for questions a and b respectively. Please include references at the end, Thank you

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We are budgeting for period 1,2 and 3 It is required that 20% of the sales in the period be in 20% the finished goods inventory Producing each units required $10000 $ 12,000 Budgeting requires 25% safty margin 25% Period 0 Period 1 Period 2 Period 3 Period 4 Sales 55 65 50 45 Finished goods Inventory 10 at the13end of period 10 9 Production 58 62 49 Fixed Budget $ 696,000 $ 744,000 $ 588,000 Safety Margin $ 174,000 $ 186,000 $ 147,000 Flexible Budget $ 870,000 $ 930,000 $ 735,000 Apparel Jewelry Hardware Sales commisions 4% 9% 7% Warrantie percentage5% 12% 8% Utilities Allocation sq. base ft Sq ft Liability insurance sales Apparel Jewelry Hardware 22000 9000 13000 Apparel Sales $ 5,000,000 Cost of goods $ 1,800,000 sold Gross Profit$ 3,200,000 Direct cost Sales commisions $ 200,000 Warranties $ 250,000 Direct costs$ 450,000 Indirect cost Utilities $ 40,000 Liability insurance $ 25,234 Indirect costs $ 65,234 Operating income $ 2,684,766 Jewelry $ 2,500,000 $ 900,000 $ 1,600,000 $ $ $ Hardware $ 3,200,000 $ 1,400,000 $ 1,800,000 225,000 $ 300,000 $ 525,000 $ $ 16,364 $ 12,617 $ 28,980 $ 1,046,020 Total $ 10,700,000 $ 4,100,000 $ 6,600,000 224,000 $ 256,000 $ 480,000 $ $ 23,636 $ 16,150 $ 39,786 $ 1,280,214 $ $ $ $ 649,000 806,000 1,455,000 80,000 54,000 134,000 5,011,000
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