Farmer Ltd absorb overheads based on direct labour hours. The total budgeted overheads for the next quarter are £250,000 and direct labour hours are budgeted at 20,000 hours to make 5,000 units of product F with no idle time.The actual overhead incurred in the quarter was £260,000, labour hours were 21,000 and the company produced 5,100 units of product F.What was the amount of under or over absorption in the quarter? A Under absorbed by £5,000 B Over absorbed by £5,000 C Under absorbed by £10,000 D Over absorbed by £10,000
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.
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