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Franklin Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs. Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative $36.20 8.30 3.60 6.10 6.40 $126,000 46,000 Franklin planned to make and sell 24,000 copies of the book. Required: a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 23,000 and 25,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 25,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

Franklin Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs. Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative $36.20 8.30 3.60 6.10 6.40 $126,000 46,000 Franklin planned to make and sell 24,000 copies of the book. Required: a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 23,000 and 25,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 25,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

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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Franklin Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs. Manufacturing overhead Selling, general, and administrative $36.20 8.30 3.60 6.10 6.40 $126,000 46,000 Franklin planned to make and sell 24,000 copies of the book. Required: a. d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 23,000 and 25,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 25,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)
Transcribed Image Text:Franklin Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs. Manufacturing overhead Selling, general, and administrative $36.20 8.30 3.60 6.10 6.40 $126,000 46,000 Franklin planned to make and sell 24,000 copies of the book. Required: a. d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 23,000 and 25,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 25,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)
Number of units Sales revenue Variable manufacturing costs Materials Labor Manufacturing overhead Variable selling general, and administrative costs Contribution margin Fixed costs Manufacturing overhead Variable selling general, and administrative costs Net income Master Budget 24,000 $ 0 0 $ Flexible Budgets 23,000 0 0 S 25,000 0 0 Volume Variances
Transcribed Image Text:Number of units Sales revenue Variable manufacturing costs Materials Labor Manufacturing overhead Variable selling general, and administrative costs Contribution margin Fixed costs Manufacturing overhead Variable selling general, and administrative costs Net income Master Budget 24,000 $ 0 0 $ Flexible Budgets 23,000 0 0 S 25,000 0 0 Volume Variances
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