Budgeted data for the year considered of the following Item Personal Purchasing Machining Painting Overhead costs $40,000 $35,000 $128,000 $48,000 # of employees 10 15 25 138 Machine Hour 0 0 23500 29 Direct labor costs 0 0 32,000 147,000 Purchase requisitions 6 0 2650 450 1. Allocate the two service departments' costs using the sequential allocation method and develop departmental overhead rates for each of the production departments using the most logical base for each department. 2. Calculate and give the journal entry to record the total amount of under- or overapplied over- head for the company, assuming the following actual results for the year: Machining Painting Overhead costs $173,000 78,540 Direct labour costs $38,300 139,750 Machine hours 24,150 29 3. briefly discuss reasons for allocating service department costs.
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.
Budgeted data for the year considered of the following
| Item | Personal | Purchasing | Machining | Painting |
| $40,000 | $35,000 | $128,000 | $48,000 | |
| # of employees | 10 | 15 | 25 | 138 |
| Machine Hour | 0 | 0 | 23500 | 29 |
| Direct labor costs | 0 | 0 | 32,000 | 147,000 |
| Purchase requisitions | 6 | 0 | 2650 | 450 |
1. Allocate the two service departments' costs using the sequential allocation method and develop departmental overhead rates for each of the production departments using the most logical base for each department.
2. Calculate and give the
| Machining | Painting | |
| Overhead costs | $173,000 | 78,540 |
| Direct labour costs | $38,300 | 139,750 |
| Machine hours | 24,150 | 29 |
3. briefly discuss reasons for allocating service department costs.
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