etermine the monthly fixed electricity cost. Fixed Electricity Cost Highest month $ 12000 Lowest month $ 12000 Estimate the total variable electricity costs and fixed electricity costs if 4,800 machine hours are projected to be used next month.
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.
Madison Company manufactures major appliances. Because of growing interest in its products, it has just had its most successful year. In preparing the budget for next year, its controller compiled the following information: Month Volume in Machine Hours Electricity Cost July 6,000 $ 60,000 August 5,000 53,000 September 4,500 49,500 October 4,000 46,000 November 3,500 42,500 December 3,000 36,000 Six-month total 26,000 $287,000 Using the high-low method, determine the variable electricity cost per machine hour. $ 8 per machine hour Determine the monthly fixed electricity cost. Fixed Electricity Cost Highest month $ 12000 Lowest month $ 12000 Estimate the total variable electricity costs and fixed electricity costs if 4,800 machine hours are projected to be used next month.
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