January 2018 Budgeted Amount of Cost Driver Used Fresh Snacks January 2018 Budgeted Cost-Driver Rate Soft Drinks Packaged Food Activity Ordering Cost Driver Number of purchase orders Number of deliveries Hours of stocking time Number of items sold $ 45 $ 41 24 14 14 12 62 19 Delivery Shelf stocking Customer support $10.50 $ 0.09 172 94 16 4,600 34,200 10,750 1. What is the total budgeted indirect cost at the Jerico store in January 2018? What is the total budgeted cost of each activity at the Jerico store for January 2018? What is the budgeted indirect cost of each product category for January 2018? 2. Which product category has the largest fraction of total budgeted indirect costs? 3. Given your answer in requirement 2, what advantage does Jiffy Mart gain by using an activity-based approach to budgeting over, say, allocating indirect costs to products based on cost of goods sold? Required
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.
Activity-based budgeting. The Jerico store of Jiffy Mart, a chain of small neighborhood convenience stores, is preparing its activity-based budget for January 2018. Jiffy Mart has three product categories: soft drinks (35% of cost of goods sold [COGS]), fresh produce (25% of COGS), and packaged food (40% of COGS). The following table shows the four activities that consume indirect resources at the Jerico store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2018.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 9 images
