Last year, Joplin company budgeted for production and sale of 1710 gizmos. Actual production and sales was 1900 gizmos for $288 each. Each item was budgeted to use 4 direct labor hour(s) and 9 piece(s) of material. Joplin expected to pay $4.00 per piece and $9.00 per hour. Joplin does not keep any raw materials inventory. Actual production required the following: 15390 pieces at $4.40 per piece 6840 hours at $9.90 per hour ******************************* Compute and label each of the following variances. Just do the labels on paper. Materials price variance = Materials usage variance = Labor rate variance = Labor efficiency variance =
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.
Last year, Joplin company budgeted for production and sale of 1710 gizmos.
Actual production and sales was 1900 gizmos for $288 each.
Each item was budgeted to use 4 direct labor hour(s) and 9 piece(s) of material.
Joplin expected to pay $4.00 per piece and $9.00 per hour.
Joplin does not keep any raw materials inventory.
Actual production required the following:
15390 pieces at $4.40 per piece
6840 hours at $9.90 per hour
*******************************
Compute and label each of the following variances. Just do the labels on paper.
Materials price variance =
Materials usage variance =
Labor rate variance =
Labor efficiency variance =
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