Roberts Company has the following manufacturing overhead budget for the current month: Budgeted units to be produced $30,000 VOH* cost per unit $30 Budgeted VOH* 900,000 Budgeted FOH** Depreciation 9,000 Rent 18,000 Total budgeted FOH 27,000 Budgeted manufacturing overhead costs $927,000 *VOH − Variable Manufacturing Overhead**FOH − Fixed Manufacturing
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.
Roberts Company has the following manufacturing
|
Budgeted units to be produced |
$30,000 |
|
VOH* cost per unit |
$30 |
|
Budgeted VOH* |
900,000 |
|
Budgeted FOH** |
|
|
|
9,000 |
|
Rent |
18,000 |
|
Total budgeted FOH |
27,000 |
|
Budgeted |
$927,000 |
*VOH
−
Variable Manufacturing Overhead**FOH
−
Fixed Manufacturing OverheadWhat would be the budgeted manufacturing overhead costs for the month if Roberts Company expects to increase the budgeted production of units to
35,000
and the variable overhead cost per unit is expected to decrease to
$25
per unit?
Question content area bottom
Part 1
A.
$902,000
B.
$875,000
C.$848,000
D.$927,000
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