Instructions: Read and analyze the following problems. Provide what is asked for each item. Take note that some items may require you to derive a formula. 1. XYZ Corporation budgets factory overhead cost of P500,000 for the coming year. Compute for the overhead cost applied to the job. The following data are available: Budgeted annual overhead for planned production P500,000 Budgeted annual direct labor hours 35,000 Actual direct labor hours applied to the job 400 hours
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.
Instructions: Read and analyze the following problems. Provide what is asked for each item. Take note that
some items may require you to derive a formula.
1. XYZ Corporation budgets
overhead cost applied to the job. The following data are available:
Budgeted annual overhead for planned production P500,000
Budgeted annual direct labor hours 35,000
Actual direct labor hours applied to the job 400 hours
2. LLC Service Inc. provides professional consultancy services to third-party firms. Professional staff are
paid P150 per hour, and their time is billed at P500 per hour. The firm estimates the following total costs
for the coming year:
Estimated cost of professional staff P3,000,000 (20,000 hours of staff time)
Estimated other costs (overhead) 4,000,000
Total estimated costs P7,000,000
ABC Corp. became a new client of the firm with job requirements of 100 hours of professional staff time.
Present in a tabular format the total billing for the job.
3. Compute for the total cost of the job in the previous item and the total profit which will be generated
by LLC Service Inc. from performing the services requested by ABC Corp.
4. Water Pipe Manufacturing completes job #727 on January 10. The job used 45 direct labor hours and 40
machine hours. The job consumed P3,200 worth of materials. The average direct labor rate is P70 per
hour, and the company uses the predetermined overhead rate of 8.50 per direct labor hour. Compute
for the direct labor, applied overhead, and total cost of job #727.
5. The owner of Big Burger Restaurant wants to determine the unit cost associated with their 10,000 sales
of burgers for January 201A.
The variable expenses per burger:
Burger patty P5.50
Bread 2.00
Ketchup 0.50
Lettuce 6.00
Mayonnaise 0.50
Total variable cost P14.50
The fixed expenses are as follows:
Labor P5,500
Rent 2,500
Insurance 500
Advertising 2,000
Utilities 4,800
Total fixed cost P15,300
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