Benson Company has provided the following Year 2 data. Budget Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense Variances Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense BENSON COMPANY Internal Income Statement for Year 2 Budget Required Prepare a budgeted and actual Income statement for Internal use. Sales Variable expenses: Product costs Selling expenses Other expenses Contribution margin $ 504,000 186,000 46,000 3,300 16,500 23,400 1,900 700 Fixed expenses: Product costs Selling expenses Other expenses Operating income (loss) Interest expense Net income (loss) 8,600 Unfavorable 4,200 Favorable 2,300 Unfavorable 1,700 Unfavorable 310 Favorable 490 Favorable 190 Unfavorable 90 Favorable Actual

Benson Company has provided the following Year 2 data. Budget Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense Variances Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense BENSON COMPANY Internal Income Statement for Year 2 Budget Required Prepare a budgeted and actual Income statement for Internal use. Sales Variable expenses: Product costs Selling expenses Other expenses Contribution margin $ 504,000 186,000 46,000 3,300 16,500 23,400 1,900 700 Fixed expenses: Product costs Selling expenses Other expenses Operating income (loss) Interest expense Net income (loss) 8,600 Unfavorable 4,200 Favorable 2,300 Unfavorable 1,700 Unfavorable 310 Favorable 490 Favorable 190 Unfavorable 90 Favorable Actual

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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Matthew works in the accounting department of a local footwear manufacturer that specializes in clogs and boots. Clogs and boots typically sell for $97 and $192 per pair, respectively. Based on past experience, fashion trends, and seasonal shifts, the company expected to sell 760 pairs of clogs and 240 pairs of boots. The variable cost per pair was $52 for clogs and $78 for boots. At the end of the year, Matthew evaluated the company's sales and contribution margin amounts against the budget. Actual results for the year were as follows. . . . (a) Actual sales volume: clogs, 869; boots, 231. Actual selling price: clogs, $108 per pair; boots, $181 per pair. Actual per-unit variable costs for each product were the same as budgeted. Your answer is correct.
Find the values of the missing items (a) through (x). Assume the actual sales volume equals actual production volume. Marketing and Administrative Sales Price Variance Variance Units Sales Revenue Less: Variable Manufacturing Costs Variable marketing and administrative costs Contribution margin Fixed manufacturing costs Fixed marketing and administrative costs Operating Profit PreviousNext Reported income statement (based on actual sales volume) Manufacturing variance (a) (g) (n) (q) (r) (t) $4,320 $3,600 (0) $1,800 U $ 400 F (u) (p) (s) (v) (w) $3,600 F (X) $3,600 F Flexible Budget (based on actual sales volume (b) (h) (m) Sales Activity Variance 4,000 F (1) $19,200 (i) $4,800 $800 U $12,000 (k) $3,000 $4,000 (1) Master Budget (based on budgeted sales volume) 20,000 $30,000 (c) (d) (e) (f) $16,000 $10,000
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixedCost EstimatedVariableCost(perunitsold) Production costs: Direct materials $22 Direct labor 14 Factory overhead $514,300 11 Selling expenses: Sales salaries and commissions 106,900 5 Advertising 36,200 Travel 8,000 Miscellaneous selling expense 8,800 4 Administrative expenses: Office and officers' salaries 104,500 Supplies 12,900 2…
Sales Revenue Approach, Variable Cost Ratio, Contribution MarginRatioArberg Company’s controller prepared the following budgeted income statement for thecoming year: Required:1. What is Arberg’s variable cost ratio? What is its contribution margin ratio?2. Suppose Arberg’s actual revenues are $30,000 more than budgeted. By how much willoperating income increase? Give the answer without preparing a new income statement.3. How much sales revenue must Arberg earn to break even? Prepare a contribution marginincome statement to verify the accuracy of your answer.4. What is Arberg’s expected margin of safety?5. What is Arberg’s margin of safety if sales revenue is $380,000?
Contribution Margin Ratio, Variable Cost Ratio, Break-Even Sales Revenue The controller of Ashton Company prepared the following projected income statement: Sales $88,000 Total variable cost 23,760 Contribution margin $64,240 Total fixed cost 43,800 Operating income $20,440 Required: 1. Calculate the contribution margin ratio. Note: Enter as a percent, rounded to the nearest whole number. fill in the blank 1 % 2. Calculate the variable cost ratio. Note: Enter as a percent, rounded to the nearest whole number.fill in the blank 2 % 3. Calculate the break-even sales revenue for Ashton. Note: Round your answer to the nearest dollar. $fill in the blank 3 4. How could Ashton increase projected operating income without increasing the total sales revenue? Decrease the contribution margin ratio
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: Estimated Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials $50.00 Direct labor 30.00 Factory overhead $350,000 6.00 Selling expenses: Sales salaries and commissions 340,000 4.00 Advertising 116,000 Travel 4,000 Miscellaneous selling expense 2,300 1.00 Administrative expenses: Office and officers' salaries 325,000 Supplies 6,000 4.00 Miscellaneous administrative expense 8,700 1.00 Total $1,152,000 $96.00 It is expected that 12,000 units will be sold at a price…
A company reports the following contribution margin income statement. Contribution Margin Income Statement For Year Ended December 31 Sales (19,200 units at $22.50 each) Variable costs (19,200 units at $18.00 each) Contribution margin. Fixed costs Income The manager believes the company can increase sales volume to 22,000 total units by increasing advertising costs by $16,200. Required A Required B Complete this question by entering your answers in the tabs below. Contribution Margin Income Statement For Year Ended December 31 $ 432,000 345,600 Prepare a contribution margin income statement assuming the company incurs the additional advertising costs and sales volume increases to 22,000 units. Sales Variable costs Contribution margin 86,400 64,800 $ 21,600 Fixed costs Income
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixed Cost Estimated Variable Cost(per unit sold) Production costs: Direct materials — $19 Direct labor — 13 Factory overhead $105,800 10 Selling expenses: Sales salaries and commissions 22,000 4 Advertising 7,400 — Travel 1,700 — Miscellaneous selling expense 1,800 4 Administrative expenses: Office and officers' salaries 21,500 — Supplies 2,600…
6. Using a responsibility income statement Shown below is the current monthly income statement of Metro Video, by profit centers: Sales Variable Costs Contribution margin Fixed costs traceable to departments Departments responsibility margins Common fixed costs Income from operations METRO VIDEO Income Statement by Profit Centers For the Month Ended April 30, 20 Metro Video Dollars % $560,000 100 (268,800) (48) $291,200 52 (67,200) (12) $224,000 (61,600) $162,400 40 29 Equipment Sales Dollars $280,000 (198,800) $ 81,200 (25,200) Segments $56,000 % 100 71) 29 (09) Video Rentals Dollars $280,000 (70,000) $210,000 (42,000) 20 $168,000 % 100 (25) 75 (15) 60 On the basis of this information, compute the increase in monthly income from operations that may be expected to result from each of the following actions: (a) Spending $5,000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35%. $_ (b) Closing the Equipment Sales Department and allowing the…
TB MC Qu. 16-80 (Static) The net effect of AR-10's sales volume variance on profit: Duo, Incorporated Duo, Incorporated, carries two products and has the following year-end income statement (000s omitted) Product ZR-7 Units Sales $ Variable costs Product AR-10 Multiple Choice Budget 2,000 $ 6,000 2,400 1,800 $4,200 $ 1,800 Actual 2,800 $ 7,560 2,800 1,900 $4,700 $ 2,860 Fixed Costs Total Costs Operating income The net effect of AR-10's sales volume variance on profit is: Budget 6,000 $ 12,000 6,000 2,400 $ 8,400 $ 3,600 Actual 5,600 $ 11,760 5,880 2,400 $ 8,280 $ 3,480
Jordan Company nas provided the following year data. Budget Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense Variances Sales Variable product costs. Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense JORDAN COMPANY Internal Income Statement for Year 2 Budget Sales Variable expenses: Product costs Selling expenses Other expenses Contribution margin $ 519,000 202,000 Required Prepare a budgeted and actual income statement for Internal use. Fixed expenses: Product costs Selling expenses Other expenses Operating income (loss) Interest expense Net income (loss) 49,000 3,200 16,000 24,000 1,400 688 8,200 Unfavorable 5,000 Favorable 2,200 Unfavorable 1,100 Unfavorable 290 Favorable 460 Favorable 140 Unfavorable 100 Favorable Actual
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixed Cost Estimated Variable Cost(per unit sold) Production costs: Direct materials — $28 Direct labor — 19 Factory overhead $495,200 14 Selling expenses: Sales salaries and commissions 102,900 6 Advertising 34,800 — Travel 7,700 — Miscellaneous selling expense 8,500 6 Administrative expenses: Office and officers' salaries 100,600 — Supplies 12,400…