Kathy’s Kettle Potato Chips produces gourmet chips distributed to chain sub shops throughout California. To ensure that their chips are of the highest quality and have taste appeal, Kathy has a rigorous inspection process. For quality control purposes, Kathy has a standard based on the number of pounds of chips inspected per hour and the number of pounds that pass or fail the inspection. Kathy expects that for every 1,000 pounds of chips produced, 200 pounds of chips will be inspected. Inspection of 200 pounds of chips should take 1 hour. Kathy also expects that 1% of the chips inspected will fail the inspection. During the month of May, Kathy produced 113,000 pounds of chips and inspected 22,300 pounds of chips in 120 hours. Of the 22,300 pounds of chips inspected, 215 pounds of chips failed to pass the inspection. Q. Compute two variances that can be used to evaluate the percentage of the chips that fails the inspection
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.
Kathy’s Kettle Potato Chips produces gourmet chips distributed to chain sub shops throughout California. To ensure that their chips are of the highest quality and have taste appeal, Kathy has a rigorous inspection process. For quality control purposes, Kathy has a standard based on the number of pounds of chips inspected per hour and the number of pounds that pass or fail the inspection. Kathy expects that for every 1,000 pounds of chips produced, 200 pounds of chips will be inspected. Inspection of 200 pounds of chips should take 1 hour. Kathy also expects that 1% of the chips inspected will fail the inspection. During the month of May, Kathy produced 113,000 pounds of chips and inspected 22,300 pounds of chips in 120 hours. Of the 22,300 pounds of chips inspected, 215 pounds of chips failed to pass the inspection.
Q. Compute two variances that can be used to evaluate the percentage of the chips that fails the inspection
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