3. Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and management needs to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales. Sales $3,500,000 Cost of goods sold Direct material 900,000 Direct labor 1,000,000 Variable manufacturing overhead Fixed manufacturing overhead Cost of goods sold Gross profit Variable sales and administration expenses Fixed sales and administration expenses Income before taxes 250,000 80,000 2,230,000 1,270,000 100,000 950,000 220,000 Taxes 66,000 Net income $ 154,000

3. Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and management needs to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales. Sales $3,500,000 Cost of goods sold Direct material 900,000 Direct labor 1,000,000 Variable manufacturing overhead Fixed manufacturing overhead Cost of goods sold Gross profit Variable sales and administration expenses Fixed sales and administration expenses Income before taxes 250,000 80,000 2,230,000 1,270,000 100,000 950,000 220,000 Taxes 66,000 Net income $ 154,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information Use the following information for the Quick Study below. (Algo) [The following information applies to the questions displayed below.] The fixed budget for 20,400 units of production shows sales of $550,800; variable costs of $61,200; and fixed costs of $142,000. QS 21-4 (Algo) Flexible budget performance report LO P1 The company's actual sales were 26,700 units at $674,900. Actual variable costs were $113,300 and actual fixed costs were $137,000. Prepare a flexible budget performance report. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Sales Variable costs Contribution margin Fixed costs Income $ Flexible Budget Performance Report Flexible Budget Actual Results 0 0 $ 0 0 Variances Favorable/ Unfavorable Unfavorable Unfavorable Unfavorable Favorable Unfavorable
The following data have been extracted from the budgets of Kelvin Ltd,a company that manufacture and sells a single product $per unit Selling price Direct material cost Direct wages Variable overhead Fixed overhead 45 10 4 2.50 1.50 Fixed production overhead costs are budgeted at $400,000 per annum. Normal production levels are expected to be 200,000 units per annum. Actual Fixed Production overheads are $120,000 Budgeted administration costs are $120,000 per annum. The following pattern of sales and production is expected during 2003: Sales (units) Production (units) 60,000 70,000 You are required a. To prepare budgeted profit statements for the year using (i) (ii) Marginal Costing Absorption Costing b. To reconcile the profits for the year
Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and management needs to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales. Flexible Budget 100,000 80,000 90,000 Sales $3,570,000 $ Cost of Goods Sold Direct Material $900,000 $ $ Direct Labor 1,100,000 Variable Manufacturing Overhead 240,000 Fixed Manufacturing Overhead 70,000 Cost of Goods Sold $2,310,000 $ $4 Gross Profit $1,260,000 $4 Variable Sales and Administrative Expenses 100,000 Fixed Sales and Administrative Expenses 940,000 Income Before Taxes $220,000 Taxes 66,000 Net Income/Lss $154,000 $
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Required information Use the following information for the Quick Study below. (Algo) [The following information applies to the questions displayed below.] The fixed budget for 21,300 units of production shows sales of $511,200; variable costs of $63,900; and fixed costs of $142,000. QS 21-4 (Algo) Flexible budget performance report LO P1 The company's actual sales were 26,000 units at $576,000. Actual variable costs were $113,900 and actual fixed costs were $136,000. Prepare a flexible budget performance report. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Contribution margin Flexible Budget Performance Report Flexible Budget Actual Results Variances Favorable/ Unfavorable
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