Bally Incorporated has identified the following cost drivers for its expected overhead costs for the year: Cost Pools Budgeted Cost Cost Driver Cost Driver Level Setup $ 40,000 Number of setups 200 Ordering 20,000 Number of orders 1,000 Maintenance 50,000 Machine hours 5,000 Power 10,000 Kilowatt hours 10,000 Total direct labor hours budgeted = 2,000 hours. The following data applies to Product X, one of the products completed during the year. Direct materials $ 1,000 Direct labor $ 1,200 Units completed 100 Direct labor hours 40 Number of setups 4 Number of orders 8 Machine hours 50 Kilowatt hours 100 If a volume-based costing system based on direct labor hours to assign overhead is used, the total overhead cost for Product X will be:
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.
Bally Incorporated has identified the following cost drivers for its expected
| Cost Pools | Budgeted Cost | Cost Driver | Cost Driver Level |
|---|---|---|---|
| Setup | $ 40,000 | Number of setups | 200 |
| Ordering | 20,000 | Number of orders | 1,000 |
| Maintenance | 50,000 | Machine hours | 5,000 |
| Power | 10,000 | Kilowatt hours | 10,000 |
Total direct labor hours budgeted = 2,000 hours.
The following data applies to Product X, one of the products completed during the year.
| Direct materials | $ 1,000 |
|---|---|
| Direct labor | $ 1,200 |
| Units completed | 100 |
| Direct labor hours | 40 |
| Number of setups | 4 |
| Number of orders | 8 |
| Machine hours | 50 |
| Kilowatt hours | 100 |
If a volume-based costing system based on direct labor hours to assign overhead is used, the total overhead cost for Product X will be:
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