Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below: Budgeted number of patient-visits 9,500 Budgeted variable overhead costs: Supplies (@$5.20 per patient-visit) $ 49,400 Laundry (@$8.20 per patient-visit) 77,900 Total variable overhead cost 127,300 Budgeted fixed overhead costs: Wages and salaries 52,900 Occupancy costs 85,800 Total fixed overhead cost 138,700 Total budgeted overhead cost $ 266,000 The total overhead cost at an activity level of 10,200 patient-visits per month should be
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.
Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:
| Budgeted number of patient-visits | 9,500 | |
| Budgeted variable |
||
| Supplies (@$5.20 per patient-visit) | $ | 49,400 |
| Laundry (@$8.20 per patient-visit) | 77,900 | |
| Total variable overhead cost | 127,300 | |
| Budgeted fixed overhead costs: | ||
| Wages and salaries | 52,900 | |
| Occupancy costs | 85,800 | |
| Total fixed overhead cost | 138,700 | |
| Total budgeted overhead cost | $ | 266,000 |
The total overhead cost at an activity level of 10,200 patient-visits per month should be
The overhead costs incurred can be classified as fixed and variable costs. The variable costs per unit and total fixed costs remain constant for flexible budget and planning budget.
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