Archer Pro manufactures two models of sport bows, Basic and Deluxe, using a combination of machining and hand finishing. Machine setup costs are driven by the number of setups. Indirect manufacturing labor costs increase with direct manufacturing labor costs. Equipment and maintenance costs increase with the number of machine-hours, and facility rent is paid per square foot. Capacity of the facility is 10,000 square feet, and Archer Pro is using only 75% of this capacity. Archer Pro records the cost of unused capacity as a sepa- rate line item and not as a product cost. For the current year, Archer Pro has budgeted the following: Archer Pro Budgeted Costs and Activities for the Year Ended December 31, 2017 $ 450,000 Direct materials-Basic bows Direct materials-Deluxe bows 320,000 Direct manufacturing labor-Basic bows Direct manufacturing labor-Deluxe bows Indirect manufacturing labor costs Machine setup costs Equipment and maintenance costs Facility rent 155,000 195,000 105,000 60,000 264,000 250,000 $1799,000 Total Other budget information follows: Basic Deluxe 5,000 18,000 Number of bows 10,000 Machine-hours 15,000 Number of setups Square footage of production space used 500 300 3,500 4,000

Q: Explain the term budgeted costs.

A: Budget: Budget is an effective tool to achieve the financial and operational goals of the business.…

Q: What is optimal capital budget?

A: Budget: The estimation of the income and expenditure of the particular future period and is…

Q: Does the Analysis Period Equal Project Lives?

A: Yes, the analysis period equals the project lives.

Q: What is a self-imposed budget?

A: Budget:   It is a statement of estimated revenue and expenditure for a specific period.

Q: This type of standard specify how much should be paid for the quantity of the input to be used.…

A: A standard cost is a predetermined cost which determine unit of product or service rendered during…

Q: 11. Explain what a sunk cost is, what an opportunity cost is, and how each cost should be handled…

A: A sunk cost is the cost that is already incurred and is not recoverable. This type of cost is not…

Q: What is life-cycle budgeting?

A: Budgeting:Budgeting refers to preparation of financial statements that show all the incomes and…

Q: How to estimate the Residual Value?

A: Residual value means value of fixed asset left after the use of fixed assets. Residual value also…

Q: What is a budget?

A:

Q: How is a flexible budget used?

A:

Q: How to calculate total prime cost

A: Meaning of Prime Cost: Prime costs are a firm's expenses directly related to the materials and labor…

Q: What is meant by the incremental cost of refinancing?

A: Refinancing refers to making change in the capital structure of the company by replacing the…

Q: Which investment return, expected or actual, does GAAP allow in the calculation of benefit cost?

A: Benefit cost: When an entity creates a benefit plan setting aside some moneys to meet future…

Q: Describe the procedure to compute the variance of return for a project?

A: Variance is ascertained as follows: The mean worth is dictated by including all the information…

Q: are return on investment, residual income, and EVA qualitative components?

A: Qualitative components refer to the intangible effect of the events and transactions of business…

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.