Galactic Inc. manufactures flying drone toys. Sales units for January, February, March, April and May were 340, 320, 392, 352, and 420 respectively. Budgeted production in units for January, February, and March were 335, 338, and 382 respectively. Each unit requires 3 direct labor hours and Galactic’s hourly labor rate is $17 per hour. The company’s variable overhead is $6.00 per unit produced and its fixed overhead is $5,700 per month. Required: 1. Determine Galactic's direct labor budget for the first quarter. 2. Determine Galactic's manufacturing overhead budget for the first quarter.
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.
Galactic Inc. manufactures flying drone toys. Sales units for January, February, March, April and May were 340, 320, 392, 352, and 420 respectively. Budgeted production in units for January, February, and March were 335, 338, and 382 respectively. Each unit requires 3 direct labor hours and Galactic’s hourly labor rate is $17 per hour. The company’s variable
Required:
1. Determine Galactic's direct labor budget for the first quarter.
2. Determine Galactic's manufacturing overhead budget for the first quarter.
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