Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows: Indirect labor $1.30 Indirect materials 0.60 Utilities 0.20 Fixed overhead costs per month are Supervision $4,000, Depreciation $1,600, and Property Taxes $700. The company believes it will normally operate in a range of 8,100–11,700 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,200 direct labor hours. (List variable costs before fixed costs.)
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.
Myers Company uses a flexible budget for manufacturing
| Indirect labor | $1.30 | |
|---|---|---|
| Indirect materials | 0.60 | |
| Utilities | 0.20 |
Fixed overhead costs per month are Supervision $4,000,
Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,200 direct labor hours. (List variable costs before fixed costs.)
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