You must already be aware, that master budget is a consolidation of all functional budgets like raw material, cash, production and sales budgets. There are other budgets as well and all of them have a common or separate principal budget factors like, importantly ‘sales’ whose value influences all functional budgets. Other key factors also include material labor, plant and management (capital rationing).
So, prepare a master budget in the formats of income statement and balance sheet because it includes all other budgets including capex budgets.
Next, use of cash budget and production budgets does not accept depreciation and amortisation, so account for it in the master budget. Simply, it is a projected income and balance sheet.
Finally, I like presentation. So, I will make a master budget income statement look like below:
Sales Product A Product B Total
Variable costs
Semi Variable costs
Fixed costs
Profits
The data should be put into two columns for both products while preparing a master budget. This budget includes both fixed and variable costs because, financial statements are prepared on an absorption costing basis.
Note: the above question needs to address how many workers are there who are drawing 50,000 in direct wages. Only then you will get real profit figure.
(Master budgets are also called as Fixed budgets)