Required: a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 30,000 and 32,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 32,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)
Required: a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 30,000 and 32,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 32,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 17E: Product cost method of product costing Smart Stream Inc. uses the product cost method of applying...
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Question
![Campbell Publications established the following standard price and costs for a hardcover picture book that the company produces.
Standard price and variable costs
Sales price
$4
36.90
Materials cost
8.20
Labor cost
4.00
Overhead cost
6.10
Selling, general, and administrative costs
Planned fixed costs
7.10
Manufacturing overhead
Selling, general, and administrative
$131,000
45,000
Campbell planned to make and sell 31,000 copies of the book.
Required:
a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements,
assuming production volumes of 30,000 and 32,000 units. Determine the sales and variable cost volume variances, assuming volume
is actually 32,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e.,
zero variance).)
Master Budget
Flexible Budgets
Volume Variances
Number of units
31,000
30,000
32,000
Variable manufacturing costs](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F217af487-2bd5-4c3c-9135-0f568fa5de33%2F3fbae8c5-fccd-4039-8f03-5c93e54ba684%2F2nquht_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Campbell Publications established the following standard price and costs for a hardcover picture book that the company produces.
Standard price and variable costs
Sales price
$4
36.90
Materials cost
8.20
Labor cost
4.00
Overhead cost
6.10
Selling, general, and administrative costs
Planned fixed costs
7.10
Manufacturing overhead
Selling, general, and administrative
$131,000
45,000
Campbell planned to make and sell 31,000 copies of the book.
Required:
a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements,
assuming production volumes of 30,000 and 32,000 units. Determine the sales and variable cost volume variances, assuming volume
is actually 32,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e.,
zero variance).)
Master Budget
Flexible Budgets
Volume Variances
Number of units
31,000
30,000
32,000
Variable manufacturing costs
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