The following information concerning actual results is available from Hamburg, Incorporated: Sales volume Sales revenue Variable costs: Manufacturing Marketing and administrative Fixed costs: Manufacturing Marketing and administrative Operating profit 77,040 units $ 797,800 199,570 140,850 222,000 62,790 $ 172,590 The company planned to sell 66,200 units at a price of $11 each. Variable marketing and administrative costs are budgeted at 15 percent of revenue. You have discovered that the manufacturing fixed costs are budgeted to be $3 per unit at the budgeted volume. You know that the company policy is to budget for an operating profit of $2.55 per unit. Finally, you recall that the master budget for fixed marketing and administrative costs is $66,200. Hamburg does not carry any inventories. Required: Prepare a report showing the differences between the actual results, flexible budget, and the master budget.
The following information concerning actual results is available from Hamburg, Incorporated: Sales volume Sales revenue Variable costs: Manufacturing Marketing and administrative Fixed costs: Manufacturing Marketing and administrative Operating profit 77,040 units $ 797,800 199,570 140,850 222,000 62,790 $ 172,590 The company planned to sell 66,200 units at a price of $11 each. Variable marketing and administrative costs are budgeted at 15 percent of revenue. You have discovered that the manufacturing fixed costs are budgeted to be $3 per unit at the budgeted volume. You know that the company policy is to budget for an operating profit of $2.55 per unit. Finally, you recall that the master budget for fixed marketing and administrative costs is $66,200. Hamburg does not carry any inventories. Required: Prepare a report showing the differences between the actual results, flexible budget, and the master budget.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following information concerning actual results is available from Hamburg, Incorporated:
Sales volume
Sales revenue
Variable costs:
Manufacturing
Marketing and administrative
Fixed costs:
Manufacturing
Marketing and administrative
Operating profit
77,040 units
$ 797,800
199,570
140,850
222,000
62,790
$ 172,590
The company planned to sell 66,200 units at a price of $11 each. Variable marketing and administrative costs are budgeted at 15
percent of revenue. You have discovered that the manufacturing fixed costs are budgeted to be $3 per unit at the budgeted volume.
You know that the company policy is to budget for an operating profit of $2.55 per unit. Finally, you recall that the master budget for
fixed marketing and administrative costs is $66,200. Hamburg does not carry any inventories.
Required:
Prepare a report showing the differences between the actual results, flexible budget, and the master budget.
Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for
unfavorable. If there is no effect, do not select either option.
Transcribed Image Text:Sales units
Sales revenue
Variable costs:
Manufacturing
Marketing and administrative
Contribution margin
Fixed costs:
Manufacturing
Marketing and administrative
Operating profit
$
Actual
$
77,040
797,800
199,570
140,850
$ 457,380
222,000
62,790
172,590
Manufacturing
Variance
Profit Variance Analysis
Marketing and
Administrative
Variance
Sales Price Variance Flexible Budget Sales Activity Variance Master Budget
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