Addison Co. budgets production of 2,750 units during the second quarter. Other information is as follows: Direct labor Each fini
shed unit requires 3 direct labor hours, at a cost of $7 per hour. Variable overhead Applied at the rate of $9 per direct labor hour. Fixed overhead Budgeted at $540,000 per quarter. 1. Prepare a direct labor budget. 2. Prepare a factory overhead budget.
<em>We multiply the direct labor hours per unit to the number of units to get the total direct labor hours which are again multiplied with the direct labor cost per hour to get the total direct labor costs.</em>
Direct Labor Budget
Production units 2750
<u>Direct Labor per unit 3 </u>
Direct Labor Hours 8250
<u>Direct Labor Cost / Hr $7 </u>
Direct Labor Costs $ 57750
We multiply the direct labor costs with variable overhead per hour to get the variable costs which are added to the fixed costs per quarter to get the total factory overhead budget.
The answer is A.) Recognized in the current period, regardless of whether the percentage-of-completion or completed contract method is employed.
The long -run cost function can be estimated using either time-series cost-output data collected on a plant (or firm) whose size has been variable over time, or cross-sectional cost-output dasta collected on a sample of plants,(firms) of different sizes at a particular point on time.
When a real estate agent retains or hides information directly related to the property or that is waiting to be sold, it is considered unethical. However, there may be legitimate reasons to retain information temporarily. For example, it is ethical to retain the names of dead victims until families are notified. Sometimes it is necessary to retain strategic information due to national security concerns, for example, a case involving the ongoing investigation of a terrorist plot. Or sometimes it is a good option to temporarily retain information that could unnecessarily scare the public.
It provides definite objective for evaluating performance
Budgeting: It can be defined as the process of deciding an efficient way of spending money.
A budget is a financial plan which shows the estimation of income and expenditure over a specified future period of time. A budget can be made by an individual, business organzations or government of a country.
A budget can either be surplus or deficit.
1. A surplus budget is a budget in which the estimate of income is more than expenditure.
2. A deficit budget is a budget in which the estimate of expenditure is more than income.
Benefits of budgeting includes;
1. It provides definite objectives for evaluating performance.
2. It requires all levels of management to plan ahead on a recurring basis.