ompany employees were working hard to achieve the budgeted results, as everyone would receive a bonus if profit margins of 10% were achieved. The year-end results were: Sales volume Selling price Direct materials cost/unit DL cost/unit Variable OH cost/unit Variable SGA cost/unit Fixed MOH Fixed SGA Actual 52,000 14.50 3.10 1.65 1.50 0.50 Master budget 45,000 14.00 3.00 1.70 1.50 0.50 4 205,000 195,000 127,000 122,500 1. Prepare the master budget, flexible budget and actual income statements for the year. 2. Determine the flexible budget and sales activity variances 3. What do the variances mean? 4. Did the employees get the bonus?

ompany employees were working hard to achieve the budgeted results, as everyone would receive a bonus if profit margins of 10% were achieved. The year-end results were: Sales volume Selling price Direct materials cost/unit DL cost/unit Variable OH cost/unit Variable SGA cost/unit Fixed MOH Fixed SGA Actual 52,000 14.50 3.10 1.65 1.50 0.50 Master budget 45,000 14.00 3.00 1.70 1.50 0.50 4 205,000 195,000 127,000 122,500 1. Prepare the master budget, flexible budget and actual income statements for the year. 2. Determine the flexible budget and sales activity variances 3. What do the variances mean? 4. Did the employees get the bonus?

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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