Information taken from Tuscarora Paper Company’s records for the most recent year is as follows: Direct material used ............................................................................... $290,000Direct labor ............................................................................................. 100,000Variable manufacturing overhead .......................................................... 50,000Fixed manufacturing overhead .............................................................. 80,000Variable selling and administrative costs .............................................. 40,000Fixed selling and administrative costs ................................................... 20,000 Required:1. Assuming Tuscarora Paper Company uses variable costing, compute the inventoriable costs for the year.2. Compute the year’s inventoriable costs using absorption costing.
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.
Information taken from Tuscarora Paper Company’s records for the most recent year is as follows:
Direct material used ............................................................................... $290,000
Direct labor ............................................................................................. 100,000
Variable manufacturing overhead .......................................................... 50,000
Fixed manufacturing overhead .............................................................. 80,000
Variable selling and administrative costs .............................................. 40,000
Fixed selling and administrative costs ................................................... 20,000
Required:
1. Assuming Tuscarora Paper Company uses variable costing, compute the inventoriable costs for the year.
2. Compute the year’s inventoriable costs using absorption costing.
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