Pastel Bags (PB) is a designer of high-quality backpacks and purses. Each design is made in small batches. Each spring, PB comes out with new designs for the backpack and for the purse. The company uses these designs for a year and then moves on to the next trend. The bags are all made on the same fabrication equipment that is expected to operate at capacity. The equipment must be switched over to a new design and set up to prepare for the pro- duction of each new batch of products. When completed, each batch of products is immediately shipped to a wholesaler. Shipping costs vary with the number of shipments. Budgeted information for the year is as follows: Pastel Bags Budget for Costs and Activities For the Year Ended February 28, 2017 Direct materials-purses $ 319,155 Direct materials-backpacks Direct manufacturing labor-purses Direct manufacturing labor-backpacks Setup Shipping Design Plant utilities and administration 454,995 99,000 113,000 64,000 73,000 169,000 221,000 $1,513,150 Total Other budget information follows: Backpacks 6,175 Purses Total 3,075 Number of bags Hours of production 9,250 1,665 2,585 4,250 Number of batches 120 80 200 Number of designs 4

Q: Explain the term budgeted costs.

A: Budget: Budget is an effective tool to achieve the financial and operational goals of the business.…

Q: How do you calculate contribution margin?

A: The contribution margin can be calculated by deducting the variable cost from the sales revenue.

Q: Under activity-based costing, selling and administrative expenses may be allocated using which of…

A: Budgeted activity cost is the budgeted cost prepared by the company that would be incurred on…

Q: Explain the difference between total variable costs and variable costs per unit.

A: Cost can be categorized as variable and fixed costs.

Q: how do I find direct cost per unit

A: Direct Cost A direct cost is a price that is directly associated with the production of particular…

Q: A graph that provides a visual representation of the relationship between total cost and activity…

A: The scattergraph provides a visual depiction of how changes in one variable may be connected to…

Q: Cost classifications used for predicting cost behavior include: Multiple Choice Variable cost and…

A: Variable costs are the costs that varies with the change in output but per unit variable cost…

Q: Which of the following is a carefully predetermined cost that is usually expressed on a per unit of…

A: Cost: In accounting, the cost is related to monetary value spend on raw material, services, and…

Q: A total cost equation can be used to predict future costs for various activity levels. Write the…

A: Concept The total cost is the sum of variable cost and fixed cost incurred For example if variable…

Q: What is the relationship between total carrying cost and totalordering cost at the EOQ?

A: It indicates an inverse relationship between the cost of ordering and the cost of holding at…

Q: 1.An activity that has a direct cause-effect relationship with the resources consumed is a(n) Group…

A: In activity based costing the cost are apportioned based on the respective cost drivers

Q: Describe the uses of cost-plus pricing.

A: Cost plus pricing involves adding a markup to the cost of goods and services to arrive at a selling…

Q: Distinguish between the single-rate and the dual-rate methods. The single-rate (cost-allocation)…

A: Cost Allocation: The process of assigning the cost to the cost object is cost allocation. The cost…

Q: This type of standard specify how much should be paid for the quantity of the input to be used.…

A: A standard cost is a predetermined cost which determine unit of product or service rendered during…

Q: a predetermined application rate for conversion costs is based on actual conversion costs divided by…

A: Conversion costs are costs that are incurred for converting raw materials of the business into…

Q: Distinguish betweenproduct costs and periodcosts and give examplesof each.

A: Product cost: The product cost relates to the manufacturing costs such as direct material, direct…

Q: Cost information is required for: Select one: O A. Pricing decisions O B. Valuation of inventories O…

A: Cost information means the data and information available relating to the cost of a product or…

Q: d.    Perpetual system, LIFO cost flow. e.    Periodic system, weighted-average cost flow. f.…

A: Perpetual inventory system - Movement of inventory is recorded on regular basis. Periodic inventory…

Q: Please explain the calculation of Unit contribution

A: Unit Contribution margin is contribution margin earned per unit It is calculated in 2 ways  Unit…

Q: Please specify and explain the average cost answers.

A: Average cost method assign the cost to inventory item on based on total cost of inventory dividend…

Q: Which method is used to see if a relationship between the cost driver and total cost exists?…

A: Cost drivers means activity units that will cause change in total cost for example, number of…

Q: ost classifications used for assigning costs to cost objects include: Multiple Choice Variable cost…

A: Cost Classification Determining the cost in the organisation is one of the important part in the…

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.