Prepare a flexible budget for Oriole Company so management can evaluate the company's actual performance using a more appropriate benchmark. Units sold Revenues Variable costs DM DL Variable-MOH Contribution margin Fixed-MOH Operating income Flexible Budget 10,000
Prepare a flexible budget for Oriole Company so management can evaluate the company's actual performance using a more appropriate benchmark. Units sold Revenues Variable costs DM DL Variable-MOH Contribution margin Fixed-MOH Operating income Flexible Budget 10,000
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 7E: The following data were adapted from a recent income statement of The Procter Gamble Company (PG):...
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![Prepare a flexible budget for Oriole Company so management can evaluate the company's actual performance using a more
appropriate benchmark.
Units sold
Revenues
Variable costs
DM
DL
Variable-MOH
Contribution margin
Fixed-MOH
Operating income
$
$
Flexible Budget
10,000
1000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3aff2365-9f44-4770-b8e3-e2ed0988bbf7%2F457c12d1-9ed3-4ad5-98e3-e208c13551ed%2Fufclff_processed.png&w=3840&q=75)
Transcribed Image Text:Prepare a flexible budget for Oriole Company so management can evaluate the company's actual performance using a more
appropriate benchmark.
Units sold
Revenues
Variable costs
DM
DL
Variable-MOH
Contribution margin
Fixed-MOH
Operating income
$
$
Flexible Budget
10,000
1000
![Oriole Company's actual results reveal that it was profitable in the sale of its star product: a high-end spot-cleaning vacuum for
upholstery. But it was not nearly as profitable as management had hoped. Oriole's actual income statement and master budget income
statement are as follows. In order to keep the focus on product costs, SG&A costs were omitted.
Units sold
Revenues
Variable costs
DM
DL
Variable-MOH
Contribution margin
Fixed-MOH
Operating income
DM
DL
Input
Variable-MOH
Actual Results
Fixed-MOH
10,000
$1,670,000
560,500
216,000
130,500
Here are the company's standard cost cards for each product cost.
763,000
306,000
$457,000
Quantity Standards
3.0 yards
1.6 hours
1.6 hours
Flexible Budget
1.6 hours
Price Standards
$18.00 per yard
$11.00 per hour
$7.50 per hour
$15.50 per hour
Master Budget
12,000
$2,076,000
648,000
211,200
144,000
1,072,800
297,600
$775,200
Standard Cost
per Unit
$54.00
$17.60
$12.00
$24.80](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3aff2365-9f44-4770-b8e3-e2ed0988bbf7%2F457c12d1-9ed3-4ad5-98e3-e208c13551ed%2Fapdde0e_processed.png&w=3840&q=75)
Transcribed Image Text:Oriole Company's actual results reveal that it was profitable in the sale of its star product: a high-end spot-cleaning vacuum for
upholstery. But it was not nearly as profitable as management had hoped. Oriole's actual income statement and master budget income
statement are as follows. In order to keep the focus on product costs, SG&A costs were omitted.
Units sold
Revenues
Variable costs
DM
DL
Variable-MOH
Contribution margin
Fixed-MOH
Operating income
DM
DL
Input
Variable-MOH
Actual Results
Fixed-MOH
10,000
$1,670,000
560,500
216,000
130,500
Here are the company's standard cost cards for each product cost.
763,000
306,000
$457,000
Quantity Standards
3.0 yards
1.6 hours
1.6 hours
Flexible Budget
1.6 hours
Price Standards
$18.00 per yard
$11.00 per hour
$7.50 per hour
$15.50 per hour
Master Budget
12,000
$2,076,000
648,000
211,200
144,000
1,072,800
297,600
$775,200
Standard Cost
per Unit
$54.00
$17.60
$12.00
$24.80
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