Haroot Company's master budget shows that the planned activity level for next year is expected to be 20,000 machine hours. At this level of activity, the following manufacturing overhead costs are expected: Indirect labour Factory supplies Indirect materials Depreciation on factory building Total manufacturing overhead $45,000 4,000 21,000 15,000 $85.000 If the company operates at 21,000 machine hours, how much is allowed on a flexible budget for manufacturing overhead costs? a. $89,250 b. 73,500 C. $88,500 d. $85,000
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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