Penske Brothers Fuel Injector Company uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows: $5.25 $1.30 Indirect labor Indirect materials Maintenance Utilities $.55 $.75 Fixed overhead costs per month are: $3,100 $1,020 $1,660 $1,200 Supervision Insurance Property taxes Depreciation The company believes it will normally operate in a range of 3,000 to 5,000 machine hours per month. Required Prepare a flexible manufacturing overhead budget for the expected range of activity, using increments of 1,000 machine hours.
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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