Page 308 - F2 - MA Integrated Workbook STUDENT 2018-19

Chapter 13

5.6 Labour budgets

Labour budgets are (on the whole) the number of hours multiplied by the labour rate
per hour.

Test your understanding 3

A requires, 2,400 actual labour hours for completion and it is anticipated that
there will be 20% idle time.

If the wage rate is $10 per hour, what is the budgeted labour cost for the job?

A $19,200

B $24,000

C $28,800

D $30,000

5.7 Overhead budgets

Overhead budgets will be based on budgeted activity and budgeted OAR.

5.8 The master budget

The master budget is the overall budget into which all the subsidiary budgets are
consolidated. It will normally comprise a budgeted statement of profit or loss and a
budgeted statement of financial position (and possibly also a budgeted cash flow
statement).

Illustrations and further practice

Now try TYU question 3 from Chapter 13

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