Golden Food Products produces special-formula pet food. The company carries no inventories. The master budget calls for the company to manufacture and sell 154,000 cases at a budgeted price of $94 per case this year. The standard direct cost sheet for one case of pet food follows: Direct materials Direct labor (5 pounds @ $2) (0.25 hours @ $32) $ 10 8 Variable overhead is applied based on direct labor-hours. The variable overhead rate is $84 per direct labor-hour. The fixed overhead rate (at the master budget level of activity) is $29 per unit. All nonmanufacturing costs are fixed and are budgeted at $3.9 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $440,000 favorable. Required: Note: Enter your answers in thousands of dollars.
Golden Food Products produces special-formula pet food. The company carries no inventories. The master budget calls for the company to manufacture and sell 154,000 cases at a budgeted price of $94 per case this year. The standard direct cost sheet for one case of pet food follows: Direct materials Direct labor (5 pounds @ $2) (0.25 hours @ $32) $ 10 8 Variable overhead is applied based on direct labor-hours. The variable overhead rate is $84 per direct labor-hour. The fixed overhead rate (at the master budget level of activity) is $29 per unit. All nonmanufacturing costs are fixed and are budgeted at $3.9 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $440,000 favorable. Required: Note: Enter your answers in thousands of dollars.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Golden Food Products produces special-formula pet food. The company carries no inventories. The master budget calls for the
company to manufacture and sell 154,000 cases at a budgeted price of $94 per case this year. The standard direct cost sheet for one
case of pet food follows:
Direct materials
Direct labor
(5 pounds @ $2)
(0.25 hours @ $32)
$ 10
8
Variable overhead is applied based on direct labor-hours. The variable overhead rate is $84 per direct labor-hour. The fixed overhead
rate (at the master budget level of activity) is $29 per unit. All nonmanufacturing costs are fixed and are budgeted at $3.9 million for
the coming year.
At the end of the year, the costs analyst reported that the sales activity variance for the year was $440,000 favorable.
Required:
Note: Enter your answers in thousands of dollars.
GOLDEN FOOD PRODUCTS
Flexible Budget
(thousands of dollars)
Variable costs.
Total variable costs
$
0
$
0
Fixed costs
Total fixed costs
$
0
$
0
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