Design Arts Associates is an interior decorating firm in Berlin. The following costs were incurred in the firm’s contract to redecorate the mayor’s offices. Direct material used 3,000 euros Direct professional labor 6,000 euros The firm’s budget for the year included the following estimates:
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.
Design Arts Associates is an interior decorating firm in Berlin. The following costs were incurred in the firm’s contract to redecorate the mayor’s offices.
| Direct material used | 3,000 | euros | |
| Direct professional labor | 6,000 | euros | |
The firm’s budget for the year included the following estimates:
| Budgeted |
400,000 | euros | |
| Budgeted direct professional labor | 250,000 | euros | |
Overhead is applied to contracts using a predetermined overhead rate calculated annually. The rate is based on direct professional labor cost.
Required:
Calculate the total cost of the firm’s contract to redecorate the mayor’s offices.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
