Vernon Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price $ 36.30 Materials cost 8.30 Labor cost 4.00 Overhead cost 5.40 Selling, general, and administrative costs 6.80 Planned fixed costs Manufacturing overhead $ 130,000 Selling, general, and administrative 46,000 Vernon planned to make and sell 39,000 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 38,000 and 40,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 40,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)
Vernon Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price $ 36.30 Materials cost 8.30 Labor cost 4.00 Overhead cost 5.40 Selling, general, and administrative costs 6.80 Planned fixed costs Manufacturing overhead $ 130,000 Selling, general, and administrative 46,000 Vernon planned to make and sell 39,000 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 38,000 and 40,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 40,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Vernon Publications established the following standard price and costs for a hardcover picture book that the company produces.
| Standard price and variable costs | |||
| Sales price | $ | 36.30 | |
| Materials cost | 8.30 | ||
| Labor cost | 4.00 | ||
| 5.40 | |||
| Selling, general, and administrative costs | 6.80 | ||
| Planned fixed costs | |||
| Manufacturing overhead | $ | 130,000 | |
| Selling, general, and administrative | 46,000 | ||
Vernon planned to make and sell 39,000 copies of the book.
Required:
a. - d. Prepare the pro forma income statement that would appear in the
Transcribed Image Text:Number of units
Sales revenue
Variable manufacturing costs
Fixed costs
Manufacturing overhead
Variable selling general, and administrative costs
Net income
X Answer is not complete.
Master
Budget
$
39,000
0
S
Flexible Budgets
38,000
0
0
S
40,000
0
0
Volume Variances
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