Rodger's Cabinet Manufacturers uses flexible budgets that are based on the following manufacturing data for the month of July: Direct materials $8 per unit Direct labor $5 per unit Electric power (variable) $0.30 per unit Electric power (fixed) $4,000 per month Supervisor salaries $25,000 per month Property taxes on factory $4,000 per month Straight-line depreciation $2,900 per month Prepare a flexible budget for Rodger's based on production of 10,000, 15,000, and 20,000 units.
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.
Rodger's Cabinet Manufacturers uses flexible budgets that are based on the following manufacturing data for the month of July:
| Direct materials | $8 per unit | |
| Direct labor | $5 per unit | |
| Electric power (variable) | $0.30 per unit | |
| Electric power (fixed) | $4,000 per month | |
| Supervisor salaries | $25,000 per month | |
| Property taxes on factory | $4,000 per month | |
| Straight-line |
$2,900 per month |
Prepare a flexible budget for Rodger's based on production of 10,000, 15,000, and 20,000 units.
| Rodger's Cabinet Manufacturers | |||
| Flexible Manufacturing Budget | |||
| For the Month Ended July 31 | |||
| Units of production | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 |
| Variable cost: | |||
| Direct materials ($8 per unit) | $fill in the blank 4 | $fill in the blank 5 | $fill in the blank 6 |
| Direct labor ($5 per unit) | fill in the blank 7 | fill in the blank 8 | fill in the blank 9 |
| Electric power ($0.30 per unit) | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 |
| Total variable cost | $fill in the blank 13 | $fill in the blank 14 | $fill in the blank 15 |
| Fixed cost: | |||
| Electric power | $fill in the blank 16 | $fill in the blank 17 | $fill in the blank 18 |
| Supervisor salaries | fill in the blank 19 | fill in the blank 20 | fill in the blank 21 |
| Property taxes | fill in the blank 22 | fill in the blank 23 | fill in the blank 24 |
| Depreciation expense | fill in the blank 25 | fill in the blank 26 | fill in the blank 27 |
| Total fixed cost | $fill in the blank 28 | $fill in the blank 29 | $fill in the blank 30 |
| Total |
$fill in the blank 31 | $fill in the blank 32 | $fill in the blank 33 |
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