Crane Corporation's master budget for the year is shown below:Sales (60,700 units)Cost of goods sold:Direct materialsDirect laborOverhead (variable overhead applied at 45% ofdirect labor cost)Gross profitSelling 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$ 212,450497,740247,000Required 1$ 160,24847,00037,000Required 295,50080,50057,000$ 2,306,600957,190$ 1,349,410Required:1. During the year, the company manufactured and sold 55,700 units of product. Prepare a flexible budget for this level of output.2. Now suppose that the actual level of output was 65,700 units. Prepare a flexible budget for this output level.477, 248$ 872,162Complete this question by entering your answers in the tabs below.During the year, the company manufactured and sold 55,700 units of product. Prepare a flexible budget for this level ofoutput. (Do not round intermediate calculations.)

The term "flexible budget" refers to a budget that may be changed or amended depending on the…

Crane Corporation's master budget for the year is shown below: Sales (60,700 units) Cost of goods sold: Direct materials Direct labor Overhead (variable overhead applied at 45% 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 $ 212,450 497,740 247,000 $ 160,248 47,000 37,000 95,500 80,500 57,000 $ 2,306,600 957,190 $ 1,349,410 477,248 $ 872,162 Required: 1. During the year, the company manufactured and sold 55,700 units of product. Prepare a flexible budget for this level of output. 2. Now suppose that the actual level of output was 65,700 units. Prepare a flexible budget for this output level.

Crane Corporation's master budget for the year is shown below: Sales (60,700 units) Cost of goods sold: Direct materials Direct labor Overhead (variable overhead applied at 45% 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 $ 212,450 497,740 247,000 $ 160,248 47,000 37,000 95,500 80,500 57,000 $ 2,306,600 957,190 $ 1,349,410 477,248 $ 872,162 Required: 1. During the year, the company manufactured and sold 55,700 units of product. Prepare a flexible budget for this level of output. 2. Now suppose that the actual level of output was 65,700 units. Prepare a flexible budget for this output level.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

Crane Corporation's master budget for the year is shown below:
Sales (60,700 units)
Cost of goods sold:
Direct materials
Direct labor
Overhead (variable overhead applied at 45% 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
$ 212,450
497,740
247,000
Required 1
$ 160,248
47,000
37,000
Required 2
95,500
80,500
57,000
$ 2,306,600
957,190
$ 1,349,410
Required:
1. During the year, the company manufactured and sold 55,700 units of product. Prepare a flexible budget for this level of output.
2. Now suppose that the actual level of output was 65,700 units. Prepare a flexible budget for this output level.
477, 248
$ 872,162
Complete this question by entering your answers in the tabs below.
During the year, the company manufactured and sold 55,700 units of product. Prepare a flexible budget for this level of
output. (Do not round intermediate calculations.)

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