**Malmo, Inc. Flexible Budget Analysis**Malmo, Inc. is a company that manufactures travel locks. The budgeted selling price for each lock is set at $12, while the variable production cost is $6 per lock. Additionally, the company incurs fixed budgeted costs amounting to $14,000 each month. For the month that concluded on April 30, 2018, we will assess a flexible budget to analyze the financial outcomes at two different production levels: 3,000 locks and 10,000 locks.**Flexible Budget Overview for April 2018**- **Units Produced:** The budget is prepared for two scenarios of production volumes: 3,000 units and 10,000 units.**Budget Structure:**1. **Revenue:** - Calculate the total revenue by multiplying the number of units by the selling price per lock. 2. **Variable Costs:** - Compute the total variable costs by multiplying the number of units by the variable cost per lock. 3. **Contribution Margin:** - Determine the contribution margin by subtracting total variable costs from total revenue.4. **Fixed Costs:** - Fixed costs remain constant at $14,000 regardless of the production volume.5. **Net Income:** - Calculate the net income by subtracting fixed costs from the contribution margin.This flexible budget helps in evaluating financial performance, accommodating changes in production levels, and aiding in strategic decision-making. ### Transcription of Dropdown Menu for Educational PurposesThis image shows a dropdown menu with the following options related to business and financial metrics:1. **Contribution Margin**: This metric represents the selling price per unit minus the variable cost per unit. It helps in determining the profitability of individual items.2. **Fixed Costs**: These are costs that do not change with the level of production or sales, such as rent, salaries, and insurance.3. **Operating Income**: This figure indicates the profit a company makes from its core business operations, excluding deductions of interest and taxes.4. **Sales Revenue**: This is the income from sales of goods and services before any costs or expenses are deducted.5. **Variable Costs**: These costs vary directly with the level of production or sales, such as materials and labor costs involved in producing an additional unit.The dropdown menu is used to select specific financial metrics for analysis or calculation purposes.

Malmo, Inc. manufactures travel locks. The budgeted selling price is $12 per lock, the variable cost is $6 per lock, and budgeted fixed costs are $14,000 per mo Prepare a flexible budget for output levels of 3,000 locks and 10,000 locks for the month ended April 30, 2018. Malmo, Inc. Flexible Budget For the Month Ended April 30, 2018 Budget Amounts Per Unit Units 3,000 10,000

Malmo, Inc. manufactures travel locks. The budgeted selling price is $12 per lock, the variable cost is $6 per lock, and budgeted fixed costs are $14,000 per mo Prepare a flexible budget for output levels of 3,000 locks and 10,000 locks for the month ended April 30, 2018. Malmo, Inc. Flexible Budget For the Month Ended April 30, 2018 Budget Amounts Per Unit Units 3,000 10,000

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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