Roncy Manufacturing uses enhanced powder plastics (EPP) to manufacture a high-pressure board, Dura-Plastic. Information concerning its operation in June was as follows: Master Budget units of Dura-Plastic to manufacture 8,200 Units of Dura-Plastic manufactured in June 9,200 Budgeted amount of EPP to purchase 73,000 oz. EPP material purchased 79,000 oz. EPP material used in production 75,840 oz. Standard cost of EPP used in production $ 511,920 Standard quantity of EPP per unit of Dura-Plastic 7.5 oz. Cost of EPP purchased $ 600,400 The direct materials purchase-price variance for June, to the nearest dollar, was: Multiple Choice $62,050 unfavorable. $88,480 unfavorable. $67,150 unfavorable. $64,464 unfavorable.
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.
Roncy Manufacturing uses enhanced powder plastics (EPP) to manufacture a high-pressure board, Dura-Plastic. Information concerning its operation in June was as follows:
| 8,200 | ||||
| Units of Dura-Plastic manufactured in June | 9,200 | |||
| Budgeted amount of EPP to purchase | 73,000 | oz. | ||
| EPP material purchased | 79,000 | oz. | ||
| EPP material used in production | 75,840 | oz. | ||
| $ | 511,920 | |||
| Standard quantity of EPP per unit of Dura-Plastic | 7.5 | oz. | ||
| Cost of EPP purchased | $ | 600,400 | ||
The direct materials purchase-price variance for June, to the nearest dollar, was:
-
$62,050 unfavorable.
-
$88,480 unfavorable.
-
$67,150 unfavorable.
-
$64,464 unfavorable.
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