A company manufactures card tables. The company has a policy of maintaining a finished goods inventory equal to 40 percent of the next month's planned sales. Each card table requires 3 hours of labor. The budgeted labor rate for the coming year is P13 per hour. Planned sales the months of April, May, and June are 4,000, 5,000, and 3,000 units respectively. What is the budgeted direct labor cost for May? a. P54.400 b. P163,800
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.
A company manufactures card tables. The company has a policy of maintaining a finished
goods inventory equal to 40 percent of the next month's planned sales. Each card table
requires 3 hours of labor. The budgeted labor rate for the coming year is P13 per hour.
Planned sales the months of April, May, and June are 4,000, 5,000, and 3,000 units
respectively. What is the budgeted direct labor cost for May?
a. P54.400
b. P163,800
c. P226,200
d. P179,400
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