The Wentworth Company,estimating Its Sales to Be 40,000 Units for the Upcoming

question 50

Essay

The Wentworth Company,estimating its sales to be 40,000 units for the upcoming period,prepared the following static budget:
$\begin{array}{lr}\text {Units:}&40,000\\\text {Sales}&\$400,00\\\text {Tess variable costs.}\\\text { Manufacturing costs } & 140,000 \\\text { Selling and administrative costs } & \underline{80,000} \\ \text { Contribution margin } & \$ 180,000\\\text { Less fixed costs: } &\\\text { Manufacturing costs } & 44,000 \\\text { Selling and administrative costs } & \underline{34,000}\\\text { Net income } & \underline{ \$ 102,000}\end{array}$
The owner of the business is not so sure about the 40,000 unit sales volume and has requested additional budgets.
Required:
In the table provided,prepare two additional budgets,one at 90% of the static budget volume level and one at 110% of the static budget volume level.

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Definitions:

Different Industries

Various sectors of the economy that produce different types of goods and services, such as manufacturing, technology, and healthcare.

Higher Profits

The increased financial gain achieved by a business when its revenue exceeds its expenses by a greater margin than before.

Costs

Costs refer to the amount of money required for the production of goods or services, including expenses related to labor, materials, and overheads.

Competitors

Entities or individuals that are in the same industry or market and vie for the same customers or resources.