Mike Company expects to produce 40,000 units of product CV93 during the current year. Budgeted variable manufacturing costs are direct materials $35,000, direct labor $34,000, and overhead $87,000. Annual budgeted fixed manufacturing overhead costs are $120,000 for depreciation and $60,000 for supervision. These fixed costs will remain at production level less than 50,000 units and will increase 10% when the production exceed 50,000 units. In the current month, Mike produced 53,000 units and incurred the following costs: direct materials $33,900, direct labor $44,200, variable overhead $89,500, depreciation ?, and supervision ?. Prepare a flexible budget report.
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.
EXERCISE – FLEXIBLE BUDGET
Mike Company expects to produce 40,000 units of product CV93 during the current year.
Budgeted variable
Annual budgeted fixed manufacturing overhead costs are $120,000 for
In the current month, Mike produced 53,000 units and incurred the following costs: direct materials $33,900, direct labor $44,200, variable overhead $89,500, depreciation ?, and supervision ?.
Prepare a flexible budget report.
Step by step
Solved in 4 steps
