George Ltd. budgeted records have following:- Expected Factory overhead per year $116,000 Direct labour hours per year $269,200 Direct labour cost per year $195,600 Expected machine
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.
George Ltd. budgeted records have following:-
Expected Factory
Direct labour hours per year $269,200
Direct labour cost per year $195,600
Expected machine hours $101,000
By using the above information find overhead absorption rate by i) Direct labor cost method ii) Direct labor hour rate method iii) Machine hour rate method
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