cost formula for the maintenance department of the Eifel Co. is $6,500 per month plus $3.50 per machine hour used by the production department. a. Calculate the maintenance cost that would be budgeted for the month of May in which 5,700 machine hours are planned to be used. b. Prepare an approproate performance report for the maintenance department assuming that 5,860 machine hours were actually used in the month of May, and the total maintenance cost inccured was $28,010.
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.
The cost formula for the maintenance department of the Eifel Co. is $6,500 per month plus $3.50 per machine hour used by the production department.
a. Calculate the maintenance cost that would be budgeted for the month of May in which 5,700 machine hours are planned to be used.
b. Prepare an approproate performance report for the maintenance department assuming that 5,860 machine hours were actually used in the month of May, and the total maintenance cost inccured was $28,010.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
