Bickford Company plans to sell 135,000 units in November and 180,000 units in December. Bickford's policy is that 10% of the following month's sales must be in ending inventory. On November 1, there were 14,000 units in inventory. It takes 30 minutes of direct labor time to make one unit. Direct labor wages average P17 per hour. Variable overhead is applied at the rate of P5 per direct labor hour. Fixed overhead is budgeted at P56,500 per month. What is the direct labor cost budgeted for November? * P1,181,500 P950,600 P2,152,000 P707,600
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.
Bickford Company plans to sell 135,000 units in November and 180,000 units in December. Bickford's policy is that 10% of the following month's sales must be in ending inventory. On November 1, there were 14,000 units in inventory. It takes 30 minutes of direct labor time to make one unit. Direct labor wages average P17 per hour. Variable overhead is applied at the rate of P5 per direct labor hour. Fixed overhead is budgeted at P56,500 per month. What is the direct labor cost budgeted for November? *
P1,181,500
P950,600
P2,152,000
P707,600
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