Connolly Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,100 tires at a variable cost of $80 per tire and total fixed costs of $52,000. The budgeted selling price was $110 per tire. Actual results in August 2020 were 2,900 tires manufactured and sold at a selling price of $114 per tire. The actual total variable costs were $255,200, and the actual total fixed costs were $48,000. Read the requirements. Requirement 1. Prepare a performance report with a flexible budget and a static budget. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.) Units sold Revenues Variable costs Contribution margin Fixed costs Operating income Actual Results

Connolly Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,100 tires at a variable cost of $80 per tire and total fixed costs of $52,000. The budgeted selling price was $110 per tire. Actual results in August 2020 were 2,900 tires manufactured and sold at a selling price of $114 per tire. The actual total variable costs were $255,200, and the actual total fixed costs were $48,000. Read the requirements. Requirement 1. Prepare a performance report with a flexible budget and a static budget. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.) Units sold Revenues Variable costs Contribution margin Fixed costs Operating income Actual Results

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

In the current year, Becker Sofa Company expected to sell 12,000 leather sofas. Fixed costs for the year were expected to be $8,400,000; unit sales price was budgeted at $4,600; and unit variable costs were expected to be $2,200.Becker Sofa Company's margin of safety (MOS) in sales dollars is:
Company 10, a local road building contractor, had budgeted indirect costs for 2023 of $600,000. Budgeted labour hours for the year were 12,500 costing $260,000 and budgeted machine hours were 14,000. The company marks-up the total cost of each job by 40% to determine selling price. The company has just completed a road repair for the local council. The direct costs were as follows: Materials: $32,100 Labour: 305 hours Machining: 75 hours What is the total selling price of this job assuming the company allocates overheads on: A labour hour basis? A machine hour basis? (1) (ii) A B C D (1) Labour hour basis $53,084 $74,318 $65,436 $20,496 (ii)Machine hour basis $41,659 $58,323 $49,441 $4,521
Silverstone is a company that manufactures and sells electrical engines for electrical trucks. For its 2023 budget, Silverstone estimates that unit selling price is $10,000, variable manufacturing cost per engine is $5,000. Fixed costs are $600,000 per month. Sales team incurs a flat salary of $8,000 per month, which is already included in monthly fixed cost budget. On top of that, the sales commission is 5% of selling price. Required: a. What is the contribution margin per engine? b. What is the breakeven point in units and in revenues each month? (Show your calculation steps). C. At current price level, Silverstone expects to sell 140 units of its engine. If Silverstone lowers the price by 10%, the marketing team predicts that the sales will increase to 170 units. Is it a good decision? Using the result to illustrate why. d. What is the operating leverage level if Silverstone sells 150 units per month at current price?
Estrada Corporation produced 200,000 watches that it sold for $20 each during 2019. The company determined that fixed manufacturing cost per unit was $9 per watch. The company reported a $1,200,000 gross margin on its 2019 financial statements. Required Determine the variable cost per unit, the total variable cost, and the total contribution margin.
None
Steel Metals Ltd manufactures and sells iron rods that is used in the construction of roads. The product is manufactured and sold in 20' long rods. The product is generally produced and sold to match customer demand, and there is not a significant amount of finished goods inventory at any point in time. Summary information for 2020 is as follows: Sales were $20,000,000, consisting of 5,000,000 rods. Total variable costs were $11,000,000. Total fixed costs were $8,000,000. Net income was $1,000,000. The general economic conditions appear to be deteriorating heading into 2021, and there is some concern about a reduction in sales volume. The following questions should each be answered independent of one another. Required: a) What is the company's break-even point in 20' long rods? b) Can the company sustain a 30% reduction in total volume, and remain profitable? c) The company's sole shareholder, Pant Sharma, generally lives off dividends paid by the business. The business typically…
The sports equipment division of Kevin Hall Company is operated as a profit centre. Sales for the division were budgeted for 2022 at $896,000. The only variable costs budgeted for the division were cost of goods sold ($442,000) and selling and administrative costs ($64,000). Fixed costs were budgeted at $102,000 for cost of goods sold, $92,000 for selling and administrative costs, and $75,000 for noncontrollable fixed costs. Actual results were as follows: Sales $864,000 Cost of goods sold Variable 416,000 Fixed 106,000 Selling and administrative costs Variable 65,000 Fixed 73,000 Noncontrollable fixed costs 91,000 Assume the division is an investment centre, and average operating assets were $1,000,000. What is ROI?
Using the data below, estimate the direct labor costs per unit for 2021. Consider carefully the labor effort required, on average, to get one unit of sale. Selling price per unit is $70. Ending inventory each year is zero. Production capacity is #20,000 per year. Inflation is zero. It is a several week warranty. REVENUE Direct Materials Factory & Equipment Lease Utilities Selling and Administration Maintenance Legal Fees Direct Labour Patent Amortization Utilities Selling and Administration Maintenance Legal Fees Direct Labour Patent Amortization Profit Warranty replacements (#) O5.00 to 5.50 O 5.51 to 5.99 O 5.90 to 6.10 O 6.11 to 6.20 O 6.21 to 6.50 O No answer text provided. Year 2018 Year 2019 $896,000 $1,085,000 234,000 150,000 59,000 242,400 65,000 O 78,000 O 59,000 242,400 65,000 0 78,000 0 67,600 200 288,000 150,000 68,000 264,000 80,000 23,000 96,000 30,000 68,000 264,000 80,000 23,000 96,000 30,000 86,000 500 Year 2020 $1,204,000 324,000 150,000 74,000 277,600 123,000 11,000…