Jay Draperies makes and sells curtains. Information related to its performance in 2020 is given below: (Click the icon to view the data.) Calculate Jay Draperies' flexible budget for (a) revenues, (b) variable costs, (c) fixed costs, and (d) operating income.
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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.
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- Statler Corporation wants to find an equation to estimate some of their monthly operating costs for the operating budget for 2021. The following cost and other data were gathered for 2020: (Click the icon to view the cost and other data) Read the requirements. Requirement 1. Which of the preceding costs is variable? Fixed? Mixed? Explain. Cost function Mixed Fixed Variable Cost Maintenance Health insurance Shipping costs Requirement 2. Using the high-low method, determine the cost function for each cost. Begin by selecting the general formula that represents the linear cost function for each cost. y = a +bX y = a y = bX Maintenance Health insurance Shipping costs Now determine the cost function for each cost. (Enter all values in the same format as the general linear formula. If an input field is not used in the Cost function Maintenance Explanation The cost neither remains constant in total nor remains constant per unit. Although the cost driver varies from month to month, the total…The controller of the Stump Company is preparing the budget for 2021 and needs to estimate a cost function for delivery costs. Information regarding delivery costs incurred in the prior 2 months are: LOADING... (Click the icon to view the information.) Requirements 1. Estimate the cost function for delivery. 2. Can the constant in the cost function be used as an estimate of fixed delivery cost per month? Explain. Requirement 1. Estimate the cost function for delivery. Delivery costs = + ( × ) Delivery costs = + ( × ) Requirement 2. Can the constant in the cost function be used as an estimate of fixed delivery cost per month? Explain. The cost function in requirement 1 is an estimate of how costs behave ▼ outside of within the relevant range, not at cost levels ▼ outside within the relevant range. If there are no months with zero miles driven represented in the delivery cost…Click Draperies makes and sells curtains. Information related to its performance in 2020 is given below: (Click the icon to view the data.) Calculate Click Draperies' flexible budget for (a) revenues, (b) variable costs, (c) fixed costs, and (d) operating income. Calculate Click's flexible budget for (a) revenues. Begin by determining the formula and then solve for the amount. Actual units sold 1,560 X Budgeted selling price per unit = Flexible budget for revenues × $ 361,920 232 Calculate Click's flexible budget for (b) variable costs. Begin by determining the formula and then solve for the amount. Actual units sold 1,560 X Budgeted variable cost per unit × $ 108 = Calculate Click's flexible budget for (c) fixed costs. Click's flexible budget for fixed costs is $ 73,000. = = Flexible budget for variable costs 168,480 Calculate Click's flexible budget for (d) operating income. Begin by determining the formula and then solve for the amount. (Abbreviations used: rev = revenue, vc =…
- Click Draperies makes and sells curtains. Information related to its performance in 2020 is given below: (Click the icon to view the data.) Calculate Click Draperies' static-budget variance for (a) revenues, (b) variable costs, (c) fixed costs, and (d) operating income. Begin by determining all of the actual amounts, then the static budget amounts, and finally the static-budget variances. Label each variance as favorable (F) or unfavorable (U). Units sold Revenues Variable costs Contribution margin Fixed costs Operating income Actual Results Data table Units made and sold Selling price Variable costs Fixed costs Print Actual 1,300 $205 per curtain 165,000 77,000 $ Done Budgeted 1,400 $215 per curtain $115 per curtain 76,000 XIntegrated Excel: Preparing a Contribution Format Income Statement Using the High-Low Method Jay Corporation has provided data from a two-year period to aid in planning. The Controller has asked you to prepare a contribution format income statement. Budgeted information for Quarter 1 of 2024: Sales in units Sales price per unit After analyzing expenses, the company has determined the following cost patterns. Cost of Goods Sold (per unit) Sales Commissions (per dollar of sales). Administrative Salaries (per quarter) Rent Expense (per quarter) Depreciation Expense (per quarter) Shipping has been determined to be a mixed cost with the following total costs and units: 2022 Quarter 1 Quarter 2 Quarter 3 Quarter 4 2023 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Cost $ 67,000 $ 94,000 $ 89,800 $ 92,600 $ 72,500 $80,000 $ 84,000 $ 100,000 17,000 $ 48.00 Units 12,500 21,000 13,800 20,000 13,700 14,000 14,300 22,500 $29.00 9.50€ $ 45,000 $ 27,000 $ 36,000 Required: Use the data to answer the…Barlow Company manufactures book bags and has provided the following information for June 2018: E (Click the icon to view the information.) Requirements 1. Prepare a flexible budget performance report. (Hint: You will need to calculate the flexible budget amounts for 10,000 units.) 2. As the company owner, which employees would you praise or criticize after you analyze this performance report? Requirement 1. Prepare a flexible budget performance report. (Hint. You will need to calculate the flexible budget amounts for 10,000 units.) (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank. Enter all amounts as positive values.) Barlow Company Flexible Budget Performance Report For the Month Ended June 30, 2018 1 2 3 4 - X Data Table (1) - (3) (3) - (5) Budget Flexible Sales Amounts Actual Budget Flexible Volume Static Static Budget Actual Results Per Unit Results Variance Budget Variance Budget Units 10,000 11,000 Units Sales Revenue…
- An assisted living has actual total revenues of 1.68 million, expenses of 1 million in 2018. The budgeted revenue was 1.7 million and the budgeted expenses were 900,000. What is the net income for 2018? What is the revenue variance (in dollars or percentage) for 2018? What is the total margin for 2018?The Soda Shoppe manufactures and sells three soft drinks: Kola, Lima, and Oranga. Budgeted and actual results for 2022 are as follows: (Click the icon to view the budgeted data.) (Click the icon to view the actual data.) Required 1. Compute the total sales-volume variance, the total sales-mix variance, and the total sales-quantity variance. (Calculate all variances in terms of contribution margin.) Show results for each product in your computations. 2. What inferences can you draw from the variances computed in requirement 1? Requirement 1. Compute the total sales-volume variance, the total sales-mix variance, and the total sales-quantity variance. (Calculate all variances in terms of contribution margin.) Show results for each product in your computations. Begin by computing the actual contribution margins (CM). Then, compute the budgeted contribution margins in dollars for each product and in total for 2022. Actual CM Kola Lima Oranga Total Budgeted data Kola Lima Oranga Budget for…Why is it relevant to calculate the fixed cost budget? Management must account for these fixed costs as part of their monthly expenses. Management usually forecast the fixed costs based on past financial records and take into account potential rate increase of these fixed costs on a monthly basis. Without budgeting fixed cost into the income statement, you won’t be able to calculate the net profit. All the above.
- As a newly hired management accountant, you have been asked to prepare a profit plan for the company for which you work. As part of this task, you've been asked to do some what-if analyses. Following is the budgeted Information regarding the coming year: Selling price per unit Variable cost per unit Fixed costs (per year) Required: $ 100.00 60.00 1,113,040 1. What is the breakeven volume, in units and dollars, for the coming year? 2. Assume that the goal of the company is to earn a pretax (operating) profit of $316,000 for the coming year. How many units would the company have to sell to achieve this goal? 3. Assume that of the $60 variable cost per unit the labor-cost component is $27. Current negotiations with the employees of the company indicate some uncertainty regarding the labor cost component of the variable cost figure presented above. What is the effect on the breakeven point in units if selling price and fixed costs are as planned, but the labor cost for the coming year is…Check my work As a newly hired management accountant, you have been asked to prepare a profit plan for the company for which you work. As part of this task, you've been asked to do some what-if analyses. Following is the budgeted information regarding the coming year: Selling price per unit Variable cost per unit Fixed costs (per year) Required: $ 100.00 63.00 1,227,327 1. What is the breakeven volume, in units and dollars, for the coming year? 2. Assume that the goal of the company is to earn a pretax (operating) profit of $332,001 for the coming year. How many units would the company have to sell to achieve this goal? 3. Assume that of the $63 variable cost per unit the labor-cost component is $29. Current negotiations with the employees of the company indicate some uncertainty regarding the labor cost component of the variable cost figure presented above. What is the effect on the breakeven point in units if selling price and fixed costs are as planned, but the labor cost for the…Dawn is preparing a budget for her operation. She has forecasted revenue of $1,200,000 for the budget period and now wants to complete the variable expenses portion for her forecast. Dawn reviewed her historical cost percentage records. She then established her target variable cost percentages for several variable cost categories. Use Dawn's target cost percentages to complete her variable expense forecast.