Golden Food Products produces special-formula pet food. The company carries no inventories. The master budget calls for the company to manufacture and sell 120,000 cases at a budgeted price of $60 per case this year. The standard direct cost sheet for one liter of the preservative follows: Direct materials Direct labor (3 pounds @ $2) (0.25 hours $32) $ 6 8 Variable overhead is applied based on direct labor-hours. The variable overhead rate is $16 per direct labor-hour. The fixed overhead rate (at the master budget level of activity) is $12 per unit. All nonmanufacturing costs are fixed and are budgeted at $2.2 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $336,000 favorable. Required: Prepare a flexible budget for Golden Food Products for the year. Note: Enter your answers in thousands of dollars. Variable costs: GOLDEN FOOD PRODUCTS Flexible Budget (thousands of dollars) Total variable costs $ 0 $ 0 Fixed costs:

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...
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Golden Food Products produces special-formula pet food. The company carries no inventories. The master budget calls for the
company to manufacture and sell 120,000 cases at a budgeted price of $60 per case this year. The standard direct cost sheet for one
liter of the preservative follows:
Direct materials
Direct labor
(3 pounds @ $2)
(0.25 hours
$32)
$ 6
8
Variable overhead is applied based on direct labor-hours. The variable overhead rate is $16 per direct labor-hour. The fixed overhead
rate (at the master budget level of activity) is $12 per unit. All nonmanufacturing costs are fixed and are budgeted at $2.2 million for the
coming year.
At the end of the year, the costs analyst reported that the sales activity variance for the year was $336,000 favorable.
Required:
Prepare a flexible budget for Golden Food Products for the year.
Note: Enter your answers in thousands of dollars.
Variable costs:
GOLDEN FOOD PRODUCTS
Flexible Budget
(thousands of dollars)
Total variable costs
$
0
$
0
Fixed costs:
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 120,000 cases at a budgeted price of $60 per case this year. The standard direct cost sheet for one liter of the preservative follows: Direct materials Direct labor (3 pounds @ $2) (0.25 hours $32) $ 6 8 Variable overhead is applied based on direct labor-hours. The variable overhead rate is $16 per direct labor-hour. The fixed overhead rate (at the master budget level of activity) is $12 per unit. All nonmanufacturing costs are fixed and are budgeted at $2.2 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $336,000 favorable. Required: Prepare a flexible budget for Golden Food Products for the year. Note: Enter your answers in thousands of dollars. Variable costs: GOLDEN FOOD PRODUCTS Flexible Budget (thousands of dollars) Total variable costs $ 0 $ 0 Fixed costs:
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