amos Company provides the following (partial) production budget for the next three months. Each finished unit requires 0.6 hour of direct labor at the rate of $21 per hour. The company budgets variable overhead at the rate of $25 per direct labor hour and budgets fixed overhead of $8,500 per month. Production Budget April May June Units to produce 490 620 590 1. Prepare a direct labor budget for April, May, and June. 2. Prepare a factory overhead budget for April, May, and June.
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.
Ramos Company provides the following (partial) production budget for the next three months. Each finished unit requires 0.6 hour of direct labor at the rate of $21 per hour. The company budgets variable overhead at the rate of $25 per direct labor hour and budgets fixed overhead of $8,500 per month.
| Production Budget | April | May | June |
|---|---|---|---|
| Units to produce | 490 | 620 | 590 |
1. Prepare a direct labor budget for April, May, and June.
2. Prepare a factory overhead budget for April, May, and June.
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