A company sells two types of products: standard and deluxe. It prepares the following analysis showing budgeted cost and cost driver activity for each of its three activities. Activity Factory services Setup Quality control Compute an activity rate for each activity using activity-based costing. Activity Factory services Setup Quality control Budgeted Cost $ 203,000 $ 20,000 $ 248,000 Budgeted Cost S Activity Cost Driver Square feet Setups Units inspected 203,000 20,000 248,000 Budgeted Activity Usage Standard 3,000 300 2,500 Budgeted Activity Usage Deluxe 2,800 200 5,250 Activity Rate Total 5,800 500 7,750
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
A company sells two types of products: standard and deluxe. It prepares the following analysis showing budgeted cost and cost driver activity for each of its three activities.
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