The company's budgeted production for January 2021 is 100,000 units and 150,000 units for February 2021. Each unit is expected to be work on for 2 hours at a standard direct labor cost of P100.00 per hour. Payroll cost amounting to 20% of the total payroll cost per month related to direct labor are expected to be paid next month after it was incurred. How much is the cash outflow related to direct labor in the month of February 2021?
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.
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