Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below: Budgeted number of patient-visits Budgeted variable overhead costs: Supplies (@$5.50 per patient-visit) Laundry (@$8.50 per patient-visit) Total variable overhead cost Budgeted fixed overhead costs: Wages and salaries Occupancy costs Total fixed overhead cost Total budgeted overhead cost The total overhead cost at an activity level of 7,700 patient-visits per month should be: 7,000 $ 38,500 59,500 98,000 53,650 86,250 139,900 $ 237,900
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.
Total overhead costs will include variable costs for activity level of new 7700 patient visits and Fixed overhead costs. Fixed overhead costs will remain the same as they do not change as the activity level changes.
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