The following First Quarter projected information is provided for Colossal Marketing, a Service Business that provides creative Marketing services to its clients: In January it is expected that the Business will complete 260 hours of work for its clients and charge them a 300% Mark up on all Direct Labour Costs In February it is expected that the Business will complete 280 hours of work for its clients and charge them a 300% Mark up on Direct Labour Costs In March it is expected that the Business will complete 250 hours of work for its clients and charge them a 300% Mark up on Direct Labour Cost The following Direct Labour Hours and Rates are expected to be incurred each month: Hourly Pay January Feb March Account Managers $70 80 hours 50 60 Creative and Art Directors. $50 120 hours 150 130 Media Buyers $40 60 hours 80 60 Other Direct Costs Courier charges are expected to be $1.50 per Direct Labour Hour incurred General Fixed Overhead Management estimates that total General Fixed Overhead for the year will be $120,000 and the estimated total Direct Labour Hours for the year will be 3,000. Management allocates General Fixed Overhead to Jobs based upon a Predetermined Overhead Rate using the Allocation base: Estimated Direct Labour Hours. REQUIRED: Using a Spreadsheet or Word document, prepare the following detailed Budgets on a Monthly basis for the First Quarter ending March 31st: -Service Revenue Budget -Direct Labour Budget -General Fixed Overhead Budget to be Allocated -Budgeted Income Statement
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 following First Quarter projected information is provided for Colossal Marketing, a Service Business that provides creative Marketing services to its clients:
- In January it is expected that the Business will complete 260 hours of work for its clients and charge them a 300% Mark up on all Direct Labour Costs
- In February it is expected that the Business will complete 280 hours of work for its clients and charge them a 300% Mark up on Direct Labour Costs
- In March it is expected that the Business will complete 250 hours of work for its clients and charge them a 300% Mark up on Direct Labour Cost
- The following Direct Labour Hours and Rates are expected to be incurred each month:
Hourly Pay January Feb March
Creative and Art Directors. $50 120 hours 150 130
Media Buyers $40 60 hours 80 60
Other Direct Costs
Courier charges are expected to be $1.50 per Direct Labour Hour incurred
General Fixed
Management estimates that total General Fixed Overhead for the year will be $120,000 and the estimated total Direct Labour Hours for the year will be 3,000.
Management allocates General Fixed Overhead to Jobs based upon a Predetermined Overhead Rate using the Allocation base: Estimated Direct Labour Hours.
REQUIRED: Using a Spreadsheet or Word document, prepare the following detailed Budgets on a Monthly basis for the First Quarter ending March 31st:
-Service Revenue Budget
-Direct Labour Budget
-General Fixed Overhead Budget to be Allocated
-
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