The budget for Department 6 of Cardinal Company for the current month ending March 31 is as follows: Materials $208,000 Factory wages 265,000 Supervisory salaries 67,800 Depreciation of plant and equipment 35,000 Power and light 22,500 Insurance and property taxes 15,500 Maintenance 9,700 During March, the costs incurred in Department 6 of Cardinal Company were materials, $204,000; factory wages, $285,000; supervisory salaries, $63,600; depreciation of plant and equipment, $35,000; power and light, $21,360; insurance and property taxes, $14,400; maintenance, $9,456. (a) Prepare a budget performance report for the supervisor of Department 6 of Cardinal Company for the month of March. (b) Are there any significant variances (5% or greater) of the budgeted amounts that should be examined by the supervisor?
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.
The budget for Department 6 of Cardinal Company for the current month ending March 31 is as follows:
| Materials |
$208,000 |
| Factory wages |
265,000 |
| Supervisory salaries |
67,800 |
|
35,000 |
|
| Power and light |
22,500 |
| Insurance and property taxes |
15,500 |
| Maintenance |
9,700 |
During March, the costs incurred in Department 6 of Cardinal Company were materials, $204,000; factory wages, $285,000; supervisory salaries, $63,600; depreciation of plant and equipment, $35,000; power and light, $21,360; insurance and property taxes, $14,400; maintenance, $9,456.
| (a) | Prepare a budget performance report for the supervisor of Department 6 of Cardinal Company for the month of March. |
| (b) | Are there any significant variances (5% or greater) of the budgeted amounts that should be examined by the supervisor? |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
