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Crane Corporation's master budget for the year is shown below: Sales (60,000 units) Cost of goods sold: Direct materials Direct labor Overhead (variable overhead applied at 40% of direct labor cost) Gross profit Selling expenses: Sales commissions (all variable) Rent (all fixed) Insurance (all short-term fixed) General expenses: Salaries (all short-term fixed) Rent (all short-term fixed) Depreciation (all short-term fixed) Operating income $ 168,000 450,000 240,000 $ 167,400 40,000 30,000 92,000 77,000 50,000 $ 1,860,000 858,000 $1,002,000 456,400 $ 545,600 Required: 1. During the year, the company manufactured and sold 55,000 units of product. Prepare a flexible budget for this level of output. 2. Now suppose that the actual level of output was 65,000 units. Prepare a flexible budget for this output level.

Crane Corporation's master budget for the year is shown below: Sales (60,000 units) Cost of goods sold: Direct materials Direct labor Overhead (variable overhead applied at 40% of direct labor cost) Gross profit Selling expenses: Sales commissions (all variable) Rent (all fixed) Insurance (all short-term fixed) General expenses: Salaries (all short-term fixed) Rent (all short-term fixed) Depreciation (all short-term fixed) Operating income $ 168,000 450,000 240,000 $ 167,400 40,000 30,000 92,000 77,000 50,000 $ 1,860,000 858,000 $1,002,000 456,400 $ 545,600 Required: 1. During the year, the company manufactured and sold 55,000 units of product. Prepare a flexible budget for this level of output. 2. Now suppose that the actual level of output was 65,000 units. Prepare a flexible budget for this output level.

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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During the year, the company manufactured and sold 55,000 units of product. Prepare a flexible budget for this level of output. (Do not round intermediate calculations.) Sales Less: Cost of goods sold: Direct materials Direct labor Manufacturing overhead: Variable Fixed Gross profit Less: Operating expenses: Selling expenses: Sales commissions Rent Insurance General expenses: Salaries Rent CRANE CORPORATION Flexible Budget Depreciation Operating income Sales Less: Cost of goods sold: Direct materials Direct labor Manufacturing overhead: Variable Fixed Selling expenses: Gross profit Less: Operating expenses: CRANE CORPORATION Flexible Budget General expenses: Salaries Rent Now suppose that the actual level of output was 65,000 units. Prepare a flexible budget for this output level. (Do not round Intermediate calculations.) Sales commissions Rent Insurance Depreciation Operating income $ $ (Required 1 $ $ 0 0 <Required 1 0 0 0 0 Required 2 > 0 0 Required 2 >
Transcribed Image Text:During the year, the company manufactured and sold 55,000 units of product. Prepare a flexible budget for this level of output. (Do not round intermediate calculations.) Sales Less: Cost of goods sold: Direct materials Direct labor Manufacturing overhead: Variable Fixed Gross profit Less: Operating expenses: Selling expenses: Sales commissions Rent Insurance General expenses: Salaries Rent CRANE CORPORATION Flexible Budget Depreciation Operating income Sales Less: Cost of goods sold: Direct materials Direct labor Manufacturing overhead: Variable Fixed Selling expenses: Gross profit Less: Operating expenses: CRANE CORPORATION Flexible Budget General expenses: Salaries Rent Now suppose that the actual level of output was 65,000 units. Prepare a flexible budget for this output level. (Do not round Intermediate calculations.) Sales commissions Rent Insurance Depreciation Operating income $ $ (Required 1 $ $ 0 0 <Required 1 0 0 0 0 Required 2 > 0 0 Required 2 >
Crane Corporation's master budget for the year is shown below: Sales (60,000 units) Cost of goods sold: Direct materials Direct labor Overhead (variable overhead applied at 40% of direct labor cost) Gross profit Selling expenses: Sales commissions (all variable) Rent (all fixed) Insurance (all short-term fixed) General expenses: Salaries (all short-term fixed) Rent (all short-term fixed) Depreciation (all short-term fixed) Operating income $ 168,000 450,000 240,000 $ 167,400 40,000 30,000 Required 1 Required 2 92,000 77,000 50,000 $ 1,860,000 858,000 $ 1,002,000 456,400 $ 545,600 Required: 1. During the year, the company manufactured and sold 55,000 units of product. Prepare a flexible budget for this level of output. 2. Now suppose that the actual level of output was 65,000 units. Prepare a flexible budget for this output level. Complete this question by entering your answers in the tabs below. During the year, the company manufactured and sold 55,000 units of product. Prepare a flexible budget for this level of output. (Do not round intermediate calculations.)
Transcribed Image Text:Crane Corporation's master budget for the year is shown below: Sales (60,000 units) Cost of goods sold: Direct materials Direct labor Overhead (variable overhead applied at 40% of direct labor cost) Gross profit Selling expenses: Sales commissions (all variable) Rent (all fixed) Insurance (all short-term fixed) General expenses: Salaries (all short-term fixed) Rent (all short-term fixed) Depreciation (all short-term fixed) Operating income $ 168,000 450,000 240,000 $ 167,400 40,000 30,000 Required 1 Required 2 92,000 77,000 50,000 $ 1,860,000 858,000 $ 1,002,000 456,400 $ 545,600 Required: 1. During the year, the company manufactured and sold 55,000 units of product. Prepare a flexible budget for this level of output. 2. Now suppose that the actual level of output was 65,000 units. Prepare a flexible budget for this output level. Complete this question by entering your answers in the tabs below. During the year, the company manufactured and sold 55,000 units of product. Prepare a flexible budget for this level of output. (Do not round intermediate calculations.)
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