### Actual Income Statement and Key Information**Sales:** $800,700#### Variable Costs:- **Direct Materials (DM):** $172,125 (for 11,475 yards purchased and used)- **Direct Labor (DL):** $75,276 (for 3,672 hours used)- **Variable Manufacturing Overhead (MOH):** $45,900**Contribution Margin:** $507,399#### Fixed Costs:- **Fixed Manufacturing Overhead (MOH):** $170,978- **Fixed Selling, General, and Administrative (SG&A):** $243,100**Operating Income:** $93,321### Standards Information:#### Standard Quantities and Prices:- **Direct Materials:** - Quantity per unit: 2.30 yards - Price: $16.00 per yard- **Direct Labor:** - Quantity per unit: 0.70 DL hours - Price: $21.00 per DL hour- **Variable MOH:** - Quantity per unit: 2.30 yards - Price: $5.00 per yard- **Fixed MOH:** - Quantity per unit: 2.30 yards - Price: $13.00 per yard### Additional Master Budget Information:- **Selling Price:** $175- **Fixed SG&A Expenses:** $288,600### Notes:- Marla Baldwin was anxious as she created year-end performance reports. Management hoped for favorable economic conditions to encourage consumer spending.- Production and sales ended at 5,100 units, which was 1,000 units short of the budgeted goal. **Flexible Budget Analysis Example**This example demonstrates how to construct a complete flexible budget for a company and compare it to actual results to determine flexible budget variances for each line item. The following are the main components of the budget analysis, presented in table format:1. **Sales** - Actual: $800,700 - Flexible Budget Variance: (blank) - Flexible Budget: (blank)2. **Less: Variable Costs** - **Direct Materials** - Actual: $172,125 - Flexible Budget Variance: (blank) - Flexible Budget: (blank) - **Direct Labor** - Actual: $75,276 - Flexible Budget Variance: (blank) - Flexible Budget: (blank) - **Variable Manufacturing Overhead (MOH)** - Actual: $45,900 - Flexible Budget Variance: (blank) - Flexible Budget: (blank) 3. **Contribution Margin** - Actual: $507,399 - Flexible Budget Variance: (blank) - Flexible Budget: (blank)4. **Less: Fixed Costs** - **Fixed MOH** - Actual: $170,978 - Flexible Budget Variance: (blank) - Flexible Budget: (blank) - **Selling, General, and Administrative Expenses (SG&A)** - Actual: $243,100 - Flexible Budget Variance: (blank) - Flexible Budget: (blank)5. **Operating Income** - Actual: $93,321 - Flexible Budget Variance: (blank) - Flexible Budget: (blank)This structured approach helps in identifying areas where actual performance deviated from expected performance. By analyzing the variances, companies can assess operational efficiency and financial performance, enabling informed decision-making for future planning.

The flexible budget varies as per the activity level variation. The flexible budget is contrary to static budget where the figures are constant. But the flexible budget estimate the revenue and expense as per the activity level or production and sales level.

Business

Accounting

Marla Baldwin was a blt anxious as she created the year-end performance reports. She remembered how management had hoped the economy would make a favorable turn, taking pressure off consumers so they'd feel more comfortable spending on the company's splurge Item-a luxurious hooded cotton robe. Alas, actual production and sales ended at 5,100 units, a whopping 1,000 units shy of the company's original budget. The following Information presents the company's actual Income statement and other key Information for Marla. Sales Actual Income $800,700

Marla Baldwin was a blt anxious as she created the year-end performance reports. She remembered how management had hoped the economy would make a favorable turn, taking pressure off consumers so they'd feel more comfortable spending on the company's splurge Item-a luxurious hooded cotton robe. Alas, actual production and sales ended at 5,100 units, a whopping 1,000 units shy of the company's original budget. The following Information presents the company's actual Income statement and other key Information for Marla. Sales Actual Income $800,700

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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