The following budget data are available for Happy Company: Estimated direct labor hours 12,000 Estimated direct labor dollars $90,000 Estimated factory overhead costs $179,000 Actual direct labor hours 11,500 Actual direct labor dollars $92,000 Actual factory overhead costs $180,000 If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is Group of answer choices 199% 196% $15.65 $14.92
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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The following budget data are available for Happy Company:
| Estimated direct labor hours |
12,000
|
| Estimated direct labor dollars |
$90,000
|
| Estimated |
$179,000
|
| Actual direct labor hours |
11,500
|
| Actual direct labor dollars |
$92,000
|
| Actual factory overhead costs |
$180,000
|
If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is
Predetermined overhead rate = Estimated factory overhead costs / Estimated direct labor dollars
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