FLEXIBLE BUDGETING XYZ Company produces electrical appliances. Its Assembly Department operates under a flexible budget, with monthly allowances established at 20% intervals. The following information shows fixed and total expenses at the 80% and 100% level. Total Cost Fixed 80% 100% Direct materials Rs. 16,000 Rs. 20,000 Direct labor 9,000 11,250 Supervision Rs. 500 500 500 Indirect materials 250 1,450 1,750 Property Tax 300 300 300 Maintenance 600 1,400 1,600 Power 200
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.
FLEXIBLE BUDGETING
XYZ Company produces electrical appliances. Its Assembly Department operates under a flexible budget, with monthly allowances established at 20% intervals. The following information shows fixed and total expenses at the 80% and 100% level.
|
Total Cost |
|||
|
|
Fixed |
80% |
100% |
|
Direct materials |
|
Rs. 16,000 |
Rs. 20,000 |
|
Direct labor |
|
9,000 |
11,250 |
|
Supervision |
Rs. 500 |
500 |
500 |
|
Indirect materials |
250 |
1,450 |
1,750 |
|
Property Tax |
300 |
300 |
300 |
|
Maintenance |
600 |
1,400 |
1,600 |
|
Power |
200 |
280 |
300 |
|
Insurance |
175 |
175 |
175 |
|
Depreciation |
1,600 |
1,600 |
1,600 |
Required:
Prepare a flexible budget at the 93% level.
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