Addison Co. budgets production of 2,400 units during the second quarter. In addition, information on its direct labor and its variable and fixed overhead is shown below. For the second quarter, prepare (1) a direct labor budget and (2) a factory overhead budget. Direct labor Each finished unit requires 4 direct labor hours, at a cost of $20 per hour. Variable overhead Applied at the rate of $11 per direct labor hour. Fixed overhead . Budgeted at $450,000 per quarter.
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.
Addison Co. budgets production of 2,400 units during the second quarter. In addition, information on its
direct labor and its variable and fixed
labor budget and (2) a factory overhead budget. Direct labor Each finished unit requires 4 direct
labor hours, at a cost of $20 per hour.
Variable overhead Applied at the rate of $11 per direct labor hour.
Fixed overhead . Budgeted at $450,000 per quarter.
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