The master budget of Sheridan Company shows that the planned activity level for next year is expected to be 50000 machine hours. At this level of activity, the following manufacturing overhead costs are expected: Indirect labor $720000 Machine supplies 180000 Indirect materials 150000 Depreciation on factory building 90000 Total manufacturing overhead $1140000 A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of a. $1278000. b. $1350000. c. $1368000. d. $1140000.
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
| Indirect labor | $720000 |
| Machine supplies | 180000 |
| Indirect materials | 150000 |
| 90000 | |
| Total manufacturing overhead |
$1140000
|
A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of
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