The budgeted overheads and cost driver volumes of XYZ are as follows. Cost pool Budgeted Overheads (RM) Material procurement 580,000 Material handling 250,000 Set- up 415,000 Maintenance 970,000 Quality control 176,000 Machinery 720,000
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 budgeted overheads and cost driver volumes of XYZ are as follows.
|
Cost pool |
Budgeted Overheads (RM) |
|
Material procurement |
580,000 |
|
Material handling |
250,000 |
|
Set- up |
415,000 |
|
Maintenance |
970,000 |
|
Quality control |
176,000 |
|
Machinery |
720,000 |
|
Cost driver |
Budgeted volume |
|
No of orders |
1,100 |
|
No of movements |
680 |
|
No of set ups |
520 |
|
Maintenance hours |
8400 |
|
No of inspection |
900 |
|
No of machine hours |
24,000 |
The company has produced a batch of 2,600 components of A.X-1S, its material
cost was RM 130,000 and labour cost RM 245,000. The usage activities of the said batch are as follows. Material orders is 26. Maintenance hours is 690. Material movements is 18.
Inspection is 28. Set ups is 25. Machine hours 1,800
Required
(b) Calculate the cost of batch of components using Activity Based Costing.
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