Osprey Co. prepared a master budget for 2021 reflecting indirect material costs of $170,440 based on annual production of 153,215 widgets (the annual production is spread out equally over the twelve months). During July 2021, Osprey Co. produced 10,673 widgets incurring indirect material costs of $15,600. What was the static budget amount (in dollars) for indirect materials for July 2021?
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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