Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Activity Budgeted Activity Cost Activity Base Casting $432,000 Machine hours Assembly 119,000 Direct labor hours Inspecting 33,300 Number of inspections Setup 49,500 Number of setups Materials handling 27,200 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 5,050 10,950 16,000 Direct labor hours 4,200 2,800 7,000 Number of inspections 420 480 900 Number of setups 330 220 550 Number of loads 550 250 800 Units produced 4,200 2,800 7,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Activity Rate Casting ___?___ per machine hour Assembly ___?___ per direct labor hour Inspecting ___?___ per inspection Setup ___?___ per setup Materials handling ___?___ per load Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit rates to the nearest cent. Product Total Activity Cost Activity Cost Per Unit Entry Lighting Fixtures ___?___ ___?___ Dining Room Lighting Fixtures ___?___ ___?___
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.
Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows:
Activity |
Budgeted Activity Cost |
Activity Base |
|
| Casting | $432,000 | Machine hours | |
| Assembly | 119,000 | Direct labor hours | |
| Inspecting | 33,300 | Number of inspections | |
| Setup | 49,500 | Number of setups | |
| Materials handling | 27,200 | Number of loads |
Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow:
| Activity Base | Entry | Dining | Total | |||
| Machine hours | 5,050 | 10,950 | 16,000 | |||
| Direct labor hours | 4,200 | 2,800 | 7,000 | |||
| Number of inspections | 420 | 480 | 900 | |||
| Number of setups | 330 | 220 | 550 | |||
| Number of loads | 550 | 250 | 800 | |||
| Units produced | 4,200 | 2,800 | 7,000 |
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
-
Determine the activity rate for each activity. If required, round the rate to the nearest dollar.
Activity Activity Rate Casting ___?___ per machine hour Assembly ___?___ per direct labor hour Inspecting ___?___ per inspection Setup ___?___ per setup Materials handling ___?___ per load -
Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit rates to the nearest cent.
Product Total Activity Cost Activity Cost Per Unit Entry Lighting Fixtures ___?___ ___?___ Dining Room Lighting Fixtures ___?___ ___?___
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