£173,340 Costs Direct materials (£22,500) Direct labour (£37,684) Variable production overheads (£15,52
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.
Showing your workings, answer the question below.
“Mickey Limited is a manufacturing business that uses a
|
Sales |
£173,340 |
|
Costs |
|
|
Direct materials |
(£22,500) |
|
Direct labour |
(£37,684) |
|
Variable production |
(£15,520) |
|
Fixed production overheads |
(£49,400) |
|
Profit |
48,236 |
The company’s directors are presented with the following standard cost operating statement for the month:”
|
|
|
|
Total |
|
Original budgeted net profit |
|
|
£44,540 |
|
|
Favourable |
(Adverse) |
|
|
Sales profit volume variance |
£3,696 |
|
|
|
Sales price variance |
£424 |
|
|
|
Direct materials price variance |
£1,372 |
|
|
|
Direct materials quantity variance |
|
£2,560 |
|
|
Direct labour rate variance |
- |
- |
|
|
Direct labour efficiency variance |
|
£480 |
|
|
Production overhead variance |
£240 |
|
|
|
Other overhead variance |
£3,360 |
|
|
|
Total |
£9,092 |
£3,040 |
£6,052 |
|
Actual net profit |
|
|
£50,592 |
“Required:”
- “Calculate the actual figures for sales, direct materials, direct labour, variable overheads, fixed overheads and profits.”
Step by step
Solved in 2 steps with 1 images
