Shown below is a comparison between the budgeted and actual costs data for the Mixing Department headed by Ms. Candy. Budget Actual Salaries and wages P 20,000 P 20,000 Supplies 8,000 12,000 Postage, telephone and telegraph 2,500 3,700 Repairs and maintenance 4,000 2,500 Depreciation 3,000 2,000 Light and water 2,000 2,800 The decrease in depreciation cost and repairs and maintenance is due to the disposal of an equipment during the period. The disposal was approved by the Vice President for Production when the Mixing Department reported that the equipment was not functioning efficiently. On the other hand, the increase in light and water cost is due to the adjustment in power rates imposed by Manila Electric Company. Determine the amount of cost variance that must be considered in evaluating the performance of the Mixing Department.
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.
Shown below is a comparison between the
budgeted and actual costs data for the Mixing
Department headed by Ms. Candy.
Budget Actual
Salaries and wages P 20,000 P 20,000
Supplies 8,000 12,000
Postage, telephone and telegraph 2,500 3,700
Repairs and maintenance 4,000 2,500
Light and water 2,000 2,800
The decrease in depreciation cost and repairs and
maintenance is due to the disposal of an equipment during
the period. The disposal was approved by the Vice
President for Production when the Mixing Department
reported that the equipment was not functioning efficiently.
On the other hand, the increase in light and water cost is
due to the adjustment in power rates imposed by Manila
Electric Company.
Determine the amount of cost variance that must be
considered in evaluating the performance of the Mixing
Department.
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