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Crane Corporation's master budget for the year is shown below: Sales (61,900 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 $ 191,890 495,200 259,000 $ 168,368 59,000 49,000 101,500 86,500 69,000 $ 2,228,400 946,090 $ 1,282,310 533,368 $ 748,942 Required: 1. During the year, the company manufactured and sold 56.900 units of product. Prepare a flexible budget for this level of out 2. Now suppose that the actual level of output was 66,900 units. Prepare a flexible budget for this output level.

Crane Corporation's master budget for the year is shown below: Sales (61,900 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 $ 191,890 495,200 259,000 $ 168,368 59,000 49,000 101,500 86,500 69,000 $ 2,228,400 946,090 $ 1,282,310 533,368 $ 748,942 Required: 1. During the year, the company manufactured and sold 56.900 units of product. Prepare a flexible budget for this level of out 2. Now suppose that the actual level of output was 66,900 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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Crane Corporation's master budget for the year is shown below: Sales (61,900 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 Required 2 Sales Less: Cost of goods sold: Direct materials Direct labor Required: 1. During the year, the company manufactured and sold 56,900 units of product. Prepare a flexible budget for this level of output. 2. Now suppose that the actual level of output was 66,900 units. Prepare a flexible budget for this output level. CRANE CORPORATION Flexible Budget Manufacturing overhead: Variable Fixed Gross profit Less: Operating expenses: Selling expenses: Complete this question by entering your answers in the tabs below. Required 1 During the year, the company manufactured and sold 56,900 units of product. Prepare a flexible budget for this level of output. (Do not round intermediate calculations.) Sales commissions Rent Insurance General expenses: Salaries Rent Depreciation Operating income $ 191,890 495,200 259,000 $ $ 168,368 59,000 49,000 $ 101,500 86,500 69,000 < Required 1 $ 2,228,400 946,090 $ 1,282,310 0 0 533,368 $ 748,942 0 0 Required 2 >
Transcribed Image Text:Crane Corporation's master budget for the year is shown below: Sales (61,900 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 Required 2 Sales Less: Cost of goods sold: Direct materials Direct labor Required: 1. During the year, the company manufactured and sold 56,900 units of product. Prepare a flexible budget for this level of output. 2. Now suppose that the actual level of output was 66,900 units. Prepare a flexible budget for this output level. CRANE CORPORATION Flexible Budget Manufacturing overhead: Variable Fixed Gross profit Less: Operating expenses: Selling expenses: Complete this question by entering your answers in the tabs below. Required 1 During the year, the company manufactured and sold 56,900 units of product. Prepare a flexible budget for this level of output. (Do not round intermediate calculations.) Sales commissions Rent Insurance General expenses: Salaries Rent Depreciation Operating income $ 191,890 495,200 259,000 $ $ 168,368 59,000 49,000 $ 101,500 86,500 69,000 < Required 1 $ 2,228,400 946,090 $ 1,282,310 0 0 533,368 $ 748,942 0 0 Required 2 >
Required 1 Required 2 Now suppose that the actual level of output was 66,900 units. Prepare a flexible budget for this output level. (Do not round intermediate calculations.) Sales Less: Cost of goods sold: Direct materials Direct labor CRANE CORPORATION Flexible Budget Manufacturing overhead: Variable Fixed Gross profit Less: Operating expenses: Selling expenses: Sales commissions Rent Insurance General expenses: Salaries Rent Depreciation Operating income $ $ < Required 1 0 0 0 0 Required 2 >
Transcribed Image Text:Required 1 Required 2 Now suppose that the actual level of output was 66,900 units. Prepare a flexible budget for this output level. (Do not round intermediate calculations.) Sales Less: Cost of goods sold: Direct materials Direct labor CRANE CORPORATION Flexible Budget Manufacturing overhead: Variable Fixed Gross profit Less: Operating expenses: Selling expenses: Sales commissions Rent Insurance General expenses: Salaries Rent Depreciation Operating income $ $ < Required 1 0 0 0 0 Required 2 >
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