XYZ Corporation's master budget plans for 6,000 units monthly. The master budget includes indirect labor cost of $432,000 annually. The company considers indirect labor to be a variable cost. During the month of September, 4,480 units of product were produced, and indirect labor costs of $24,776 were incurred. XYZ will report a flexible-budget variance for indirect labor of: O O $2,104 unfavorable. $11,224 favorable. $2,104 favorable. $11,224 unfavorable.
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.
Subject - account
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