Zachary Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative $ 36.50 8.90 4.50 6.00 6.50 $ 131,000 51,000 Zachary planned to make and sell 26,000 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 25,000 and 27,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 27,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). Number of units Variable manufacturing costs Fixed costs Master Budget 26,000 Flexible Budgets 25,000 Volume Variances 27,000 0 0 0 $ 0 $ 0 $ 0
Zachary Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative $ 36.50 8.90 4.50 6.00 6.50 $ 131,000 51,000 Zachary planned to make and sell 26,000 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 25,000 and 27,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 27,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). Number of units Variable manufacturing costs Fixed costs Master Budget 26,000 Flexible Budgets 25,000 Volume Variances 27,000 0 0 0 $ 0 $ 0 $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Zachary Publications established the following standard price and costs for a hardcover picture book that the company produces.
Standard price and variable costs
Sales price
Materials cost
Labor cost
Overhead cost
Selling, general, and administrative costs
Planned fixed costs
Manufacturing overhead
Selling, general, and administrative
$ 36.50
8.90
4.50
6.00
6.50
$ 131,000
51,000
Zachary planned to make and sell 26,000 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 25,000 and 27,000 units. Determine the sales and variable cost volume variances, assuming volume
is actually 27,000 units. Indicate whether the variances are favorable (F) or unfavorable (U).
Note: Select "None" if there is no effect (i.e., zero variance).
Number of units
Variable manufacturing costs
Fixed costs
Master Budget
26,000
Flexible Budgets
25,000
Volume Variances
27,000
0
0
0
$
0
$
0
$
0
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