Total Cost of Рool 3. Unit, Batch, Product, or Facility 2. Activity Cost Pool 1. Costs Included in Pool 4. Cost Driver Design engineering Engineering $ 220,000 Product Engineering Hours Equipment Setup Quality Control Factory Facilities Manufacturing Equipment
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.
| Name of Budgeted Cost | Budgeted Cost | ||
| Plant insurance | $ | 86,100 | |
| Testing raw materials | 45,000 | ||
| Manufacturing equipment setup | 7,200 | ||
| Quality inspections | 57,000 | ||
| Property taxes | 23,000 | ||
| Electricity, plant | 14,000 | ||
| Electricity, manufacturing equipment | 51,250 | ||
| 18,800 | |||
| Depreciation, manufacturing equipment | 36,700 | ||
| Maintenance worker (manufacturing equipment) | 22,500 | ||
| Indirect labor (manufacturing equipment setup) | 8,300 | ||
| Design engineering | 220,000 | ||
Required:
1. Assign each of the budgeted costs above to one of the following activity cost pools:
- Engineering
- Equipment setup
- Quality control
- Factory facilities
- Manufacturing equipment
2. Compute the total cost of each pool.
3. Indicate whether the activities in each pool are unit, batch, product, or facility level.
4. Identify the most likely driver for each cost pool from the following list:
- Number of inspections/tests
- Square feet
- Machine hours
- Engineering hours
- Number of setups
Use the following table to organize your answer. The engineering cost pool is done as an example. Other pools may have more than one cost item included.
How would i fill out the table?
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