Evanson Company Monthly Flexible Manufacturing Budget Activity level Finished units Variable costs Direct materials Direct labor Overhead Total variable costs Fixed costs Total fixed costs Total 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.
Evanson Company expects to produce 564,000 units of their product during the year. Monthly production is expected to range from 40,000 to 80,000 units. The company has budgeted
| Direct materials | $ | 20 |
| Direct labor | 21 | |
| Variable manufacturing |
22 | |
| Fixed manufacturing overhead | 3 | |
Prepare a flexible manufacturing budget using 20,000 unit increments.
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