Direct Labor Cost Budget Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows: Junior Production budget 24,200 units Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows: Pro Striker Forming Department 0.20 hour per unit. 0.35 hour per unit Forming Department Assembly Department Junior 7,300 units The direct labor rate for each department is as follows: $19.00 per hour $8.00 per hour Hours required for production: Junior Pro Striker Total Prepare the direct labor cost budget for July. Ace Racket Company Direct Labor Cost Budget For the Month Ending July 31 Pro Striker Hourly rate Total direct labor cost Assembly Department 0.50 hour per unit 0.60 hour per unit X$ Forming Department Assembly Department X$
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.
Calculating the number of hours of direct labor that will be required to create the units that are listed in the production budget may be done with the help of the direct labor budget. A more involved direct labor budget will not only compute the overall number of hours required, but it will also split down this information according to the various types of work.
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