Bryant Company’s budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attaché case are $43, $6, and $13, respectively. The president is pleased with the following performance report: Actual Costs Static Budget Variance Direct materials $438,000 $473,000 $35,000 F Direct manufacturing labor 63,600 66,000 2,400 F Direct marketing (distribution) labor 133,500 143,000 9,500 F Actual output was 10,000 attaché cases. Assume all three direct-cost items shown are variable costs. Is the president’s pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.
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.
Bryant Company’s budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attaché case are $43, $6, and $13, respectively. The president is pleased with the following performance report:
Actual Costs Static
Direct manufacturing labor 63,600 66,000 2,400 F
Direct marketing (distribution) labor 133,500 143,000 9,500 F
Actual output was 10,000 attaché cases. Assume all three direct-cost items shown are variable costs. Is the president’s pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.
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