Automatic Irrigation, Inc. is preparing its manufacturing overhead budget for the next year. Relevant data consist of the following Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Total Control Units to be produced (by quarters): 8,000 7,000 10,000 12,000 37,000 Direct labor time: 1 hour per unit Variable overhead costs per direct labor hour: Indirect Materials $0.80; Indirect Labor $1.10; and Maintenance $0.60. Fixed overhead costs per quarter: Supervisory salaries $19,250; depreciation $3,000; and maintenance $2,250. Required Prepare the manufacturing overhead budget for the next year showing quarterly data and the total amounts for the full year.
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.
Automatic Irrigation, Inc. is preparing its manufacturing
Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Total
Control Units to be produced (by quarters): 8,000 7,000 10,000 12,000 37,000
Direct labor time: 1 hour per unit
Variable overhead costs per direct labor hour: Indirect Materials $0.80; Indirect Labor $1.10; and Maintenance $0.60.
Fixed overhead costs per quarter: Supervisory salaries $19,250;
Required
Prepare the manufacturing overhead budget for the next year showing quarterly data and the total amounts for the full year.
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