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Adams Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative Adams planned to make and sell 31,000 copies of the book. Number of units Required: a.-d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements. assuming production volumes of 30,000 and 32,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 32,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). Note: Select "None" If there is no effect (l.e., zero varlance). Variable manufacturing costs Fixed costs $36.80 8.30 3.50 5.70 7.10 Master Budget 31,000 $ 126,000 52,000 Flexible Budgets 30,000 32,000 Volume Variances

Adams Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative Adams planned to make and sell 31,000 copies of the book. Number of units Required: a.-d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements. assuming production volumes of 30,000 and 32,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 32,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). Note: Select "None" If there is no effect (l.e., zero varlance). Variable manufacturing costs Fixed costs $36.80 8.30 3.50 5.70 7.10 Master Budget 31,000 $ 126,000 52,000 Flexible Budgets 30,000 32,000 Volume Variances

FINANCIAL ACCOUNTING
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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Adams Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative Adams planned to make and sell 31,000 copies of the book. Number of units Required: a.-d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements. assuming production volumes of 30,000 and 32,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 32,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). Note: Select "None" If there is no effect (l.e., zero varlance). Variable manufacturing costs Fixed costs $36.80 8.30 3.50 5.70 7.10 Master Budget 31,000 $ 126,000 52,000 Flexible Budgets 30,000 32,000 Volume Variances
Transcribed Image Text:Adams Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative Adams planned to make and sell 31,000 copies of the book. Number of units Required: a.-d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements. assuming production volumes of 30,000 and 32,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 32,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). Note: Select "None" If there is no effect (l.e., zero varlance). Variable manufacturing costs Fixed costs $36.80 8.30 3.50 5.70 7.10 Master Budget 31,000 $ 126,000 52,000 Flexible Budgets 30,000 32,000 Volume Variances
Expert Solution
Step 1: Defining flexible budget and variance

A flexible budget is prepared on the basis of the budgeted value and on the basis of different activity levels. The difference between budgeted results and actual results is known as variance. The fixed cost remains constant at each level of the flexible budget.

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