Nieto Machine Shop budgeted 4,000 labor hours and 8,000 machine hours used in May. Total budgeted overhead for May is $80,000. What is the overhead rate using labor hours and also usingmachine hours? Which would you pick and why?
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.
Nieto Machine Shop budgeted 4,000 labor hours and 8,000 machine hours used in May. Total budgeted overhead for May is $80,000. What is the overhead rate using labor hours and also using
machine hours? Which would you pick and why?
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