Johanna Computer manufactures laptop computers under its own brand, but acquires all the components from outside vendors. No computers are assembled until the order is received online from customers, so there is no finished goods inventory. When an order is received, the bill of materials required to fill the order is prepared automatically and sent electronically to the various vendors. All components are received from vendors within three days and the completed order is shipped to the customer immediately when completed, usually on the same day the components are received from vendors. The number of units in process at the end of any day is negligible. The following data are provided for the most recent month of operations: Actual components costs incurred Actual conversion costs incurred Units in process, beginning of month Units started in process during the month Units in process, end of month $1,200,000 $1,850,000 -0- 4,000 -0- (a) Assuming Johanna uses traditional cost accounting procedures: 1. How much cost was charged to Work-in-Process during the month? $ 2. How much cost was charged to cost of goods sold during the month? $ (b) Assuming Johanna is a lean production company and uses backflush costing method: 1. How much cost was charged to Work-in-Process during the month? $
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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