The budget of Bisby plc shows total production overheads of £78m. They plan to work 6m hours and total labour costs for the year are £26m. Which of the following can be a suitable absorption rate for the production overhead? i. £4 per hour ii. £13 per hour iii. £3 per labour cost iv. £13 per labour cost Select one: a. i and iii b. i and iv c. ii and iii d. ii and iv
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 of Bisby plc shows total production
Which of the following can be a suitable absorption rate for the production overhead?
i. £4 per hour
ii. £13 per hour
iii. £3 per labour cost
iv. £13 per labour cost
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