The budget for the plant in 2020 is as follows: Production plant Machine department Assembly department Manufacturing overhead costs 13 597 500 12 271 500 Direct manufacturing labor costs 1 455 000 6 075 000 Direct manufacturing labor-hours 54 000 22 500 Machine-hours 277 500 55 500 What is the budgeted manufacturing overhead rate in the machining and the assembly department? Assume the following amounts appeared at the end of 2020: Production plant Machine department Assembly department Manufacturing overhead costs incurred 15,000,000 11,973,000 Direct manufacturing labor costs 1,545,000 6,150,000 Machine-hours 300,000 51,000 4 Compute the under- or overallocated manufacturing overhead for each department and for the production plant as a whole. 5)Briefly explain why Canadian Company in Dubai uses two different manufacturing overhead cost pools in its job-costing system
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 the plant in 2020 is as follows:
|
Production plant |
Machine department |
Assembly department |
|
|
13 597 500
|
12 271 500
|
|
Direct manufacturing labor costs
|
1 455 000
|
6 075 000
|
|
Direct manufacturing labor-hours
|
54 000
|
22 500
|
|
Machine-hours |
277 500 |
55 500 |
- What is the budgeted manufacturing overhead rate in the machining and the assembly department?
Assume the following amounts appeared at the end of 2020:
|
Production plant |
Machine department |
Assembly department |
|
Manufacturing overhead costs incurred
|
15,000,000
|
11,973,000
|
|
Direct manufacturing labor costs
|
1,545,000
|
6,150,000
|
|
Machine-hours |
300,000 |
51,000 |
4 Compute the under- or overallocated manufacturing overhead for each department and for the production plant as a whole.
5)Briefly explain why Canadian Company in Dubai uses two different manufacturing overhead cost pools in its
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