WellWheats, Inc. produces breakfast cereal and sells each box, or unit, for $7. The company has forecast production for the next three months as follows: July 5,000 units, August 6,000 units, September 3,500 units. Monthly manufacturing overhead is budgeted to be $20,000 plus $5 per unit produced. What is budgeted manufacturing overhead for July?
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 information applies to the questions displayed
below.]
We discuss how to prepare the different component budgets of the
operating budget, including the sales, production, direct materials,
direct labor,
selling and administrative expense budgets. We also discuss how
to use information from all of these operating budgets to prepare a
budgeted income statement.
Knowledge Check 04
WellWheats, Inc. produces breakfast cereal and sells each box, or unit, for $7.
The company has
5,000 units, August 6,000 units, September 3,500 units. Monthly manufacturing
overhead is budgeted to be $20,000 plus $5 per unit produced. What is
budgeted manufacturing overhead for July?
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