Question: Frame U Inc which produces picture frames has the following

Frame U, Inc., which produces picture frames, has the following master budget income statement for the month of December:


The company uses the following estimates to prepare the master budget:
Sales Price...................................................................................... $20 per Unit
Sales and Production Volume....................................................... 16,000 Units
Variable Manufacturing Costs ...................................................... $11 per Unit
Variable Marketing and Administrative Costs................................ $1 per Unit
Fixed Manufacturing Costs .................................................................. $40,000
Fixed Marketing and Administrative Costs........................................... $70,000
Assume that the actual results for December were as follows:
Actual
Sales Price............................................................................................. $22 per Unit
Sales and Production Volume.............................................................. 14,000 Units
Variable Manufacturing Costs .................................................................. $162,000
Variable Marketing and Administrative Costs............................................ $17,000
Fixed Manufacturing Costs ......................................................................... $42,000
Fixed Marketing and Administrative Costs.................................................. $68,000
Compare the master budget, flexible budget, and actual results for the month ofJuly.
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  • CreatedJune 04, 2012
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