Total manufacturing overhead
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.
Preparation of Individual Budgets
During the first calendar quarter of 2016, Clinton Corporation is planning to manufacture a new product and introduce it in two regions.
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Variable |
Fixed |
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|---|---|---|---|---|---|
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(per unit) |
(total) |
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| Manufacturing costs: | |||||
| Direct materials | |||||
| A (4 lb. @ $3.15/lb.) | $12.60 | - | |||
| B (2 lb. @ $4.65/lb.) | 9.30 | - | |||
| Direct labor (0.5 hours per unit) | 7.50 | - | |||
| Manufacturing |
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| - | $7,650 | ||||
| Factory supplies | 0.90 | 4,500 | |||
| Supervisory salaries | - | 28,800 | |||
| Other | 0.75 | 22,950 | |||
| Operating expenses: | |||||
| Selling: | |||||
| Advertising | - | 22,500 | |||
| Sales salaries& commissions* | 1.50 | 15,000 | |||
| Other* | 0.90 | 3,000 | |||
| Administrative: | |||||
| Office salaries | - | 2,700 | |||
| Supplies | 0.15 | 1,050 | |||
| Other | 0.08 | 1,950 |
Material purchase cost
| Material A | Material B | ||||
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| Total pounds (lbs.) required for production | Answer
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4. Direct labor costs
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5. Manufacturing overhead costs
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| Other | Answer
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| Total manufacturing overhead | Answer
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