Budgeting Kudler Fine Foods Budget the Budgeting Essay

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Budgeting

Kudler Fine Foods Budget

The budgeting here will be from the absorption approach which is a budgeting process that considers all business overheads to be the product cost which eventually become an expense in the form of manufacturing cost of the goods and are sold as sales take place.

Budget for Kudler Fine Foods

Item

Revenues (Net sales)

$19,921,220

$22,092,633

$24,500,730

Cost of goods sold (less ending inventory)

$13,307,028

$14,570,893

$15,879,815

Total expenses

$1,928,722

$2,047,656

$2,177,855

Net operating income

$5,477,292

$5,474,084

$6,443,060

Integrative Marketing Agency (2010).

The growth rate of Kudler Fine Foods for the three years projected in the budget is 1.109% with varying profit margin of 27.49% for 2012, 24.78% for 2013 and projected 26.3% for 2014. The expenses are seen to grow with the revenues as well. This is a trend that has been consistent with the company over the last few years and into the portrayed years in the budget above.

The current GDP of U.S. stands at 1.1% for the first quarter and 2.5% for the second quarter (Bureau of Economic Analysis, 2013).

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This is an indication that the growth rate of Kudler Fine Foods is in tandem with the prevailing economic conditions and the national growth rate.

The competition in this particular business sector is high with several other gourmet food shops giving their best in the market. The most remarkable ones that are a threat to Kudler Fine Foods is Igourmet and Abe's Market both of which have favorable reviews among respected reviewing websites and customer feedback platforms like Amazon and reselleratings.com, the competitors are doing substantially well.

According to the Trading Economics (2013) analysis, the interest rate for the U.S.A. has averaged at 6.14% from 1971 to 2013. There is however a great variation in the VAT levied on the items that Kudler Fine Foods use with the highest rate being 16%.

The master budget, also referred to as static budget is one that is normally set on a planned level of activity and sales forecast by the marketing department. It is meant to give an overview of activities for a given period and.....

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