The pharmacy in a busy hospital uses pre-determined rates for absorbing total overheads, based on the budgeted number of prescriptions to be handled. A rate of $7 per prescription has been calculated, and the following overhead expenditures have been estimated at two activity levels. Total overheads Number of prescriptions $ 97,000 13,000 109,000 16,000 During a particular period fixed overheads were $45,000. Based on the data above, what was the budgeted level of activity in prescriptions to be handled during the period in question? A 13,000 B 15,000 C 16,000 D 33,333
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 pharmacy in a busy hospital uses pre-determined rates for absorbing total
budgeted number of prescriptions to be handled. A rate of $7 per prescription has been calculated, and
the following overhead expenditures have been estimated at two activity levels.
Total overheads Number of prescriptions
$
97,000 13,000
109,000 16,000
During a particular period fixed overheads were $45,000.
Based on the data above, what was the budgeted level of activity in prescriptions to be handled during
the period in question?
A 13,000
B 15,000
C 16,000
D 33,333
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
