Merlyn Company has the following budgeted variable costs per unit produced: DIRECT MATRERIALS $5.50 direct labour 2.8 Variable overhead supplies 0.65 maitenance 0.25 power 0.17 Budgeted fixed overhead costs per month include supervision of $60,000, depreciation of $71,000, and other overhead of $175,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 150,000 units, and 185,000 units.
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.
Merlyn Company has the following budgeted variable costs per unit produced:
DIRECT MATRERIALS $5.50
direct labour 2.8
Variable overhead
supplies 0.65
maitenance 0.25
power 0.17
Budgeted fixed overhead costs per month include supervision of $60,000,
Required:
1. Prepare a flexible budget for all costs of production for the following levels of production: 150,000 units, and 185,000 units.
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