When Carol Lindquist was planning Janovi's operations for this yea, she prepared the following budgeted income...

 

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When Carol Lindquist was planning Janovi's operations for this yea, she prepared the following budgeted income statement at var ious levels of sales. The CEO decided that the company's best alternative was a budget based on a sales volume of 120,000 units. 120,000 $1,800,000 100,000 140,000 Sales $1,500.000 $2. 100.000 Variable Costs Direct material 275,000 330,000 192,000 432,000 96,000 385,000 224,000 504,000 112,000 Direct labor 160,000 Overhead 360,000 80,000 Shipping Total variable costs 875,000 1,050,000 1,225,000 Contribution margin Fixed Costs 625,000 750,000 875,000 26,000 15,000 10,000 7,000 26,000 15,000 10,000 7,000 Overhead Rent 26,000 15,000 10,000 7,000 Insurance Advertising Total fixed costs 58,000 567,000 58,000 S 692.000 58,000 Operating income $ 817,000 The company's income statement, reflecting actual sales of 129,000 units, follows. Sales Variable Costs $1,935,000 352,600 216,400 465,800 110,500 1,145,300 789,700 Direct material Direct labor Overhead Shipping Total variable costs Contribution margin Fixed Costs Overhead 24,000 15,000 10,100 9,000 58,100 731,600 Rent Insurance Advertising Total fixed costs Operating income Required Prepare a performance report for Janovi showing both the flexible budget and sales volume variances. When Carol Lindquist was planning Janovi's operations for this yea, she prepared the following budgeted income statement at var ious levels of sales. The CEO decided that the company's best alternative was a budget based on a sales volume of 120,000 units. 120,000 $1,800,000 100,000 140,000 Sales $1,500.000 $2. 100.000 Variable Costs Direct material 275,000 330,000 192,000 432,000 96,000 385,000 224,000 504,000 112,000 Direct labor 160,000 Overhead 360,000 80,000 Shipping Total variable costs 875,000 1,050,000 1,225,000 Contribution margin Fixed Costs 625,000 750,000 875,000 26,000 15,000 10,000 7,000 26,000 15,000 10,000 7,000 Overhead Rent 26,000 15,000 10,000 7,000 Insurance Advertising Total fixed costs 58,000 567,000 58,000 S 692.000 58,000 Operating income $ 817,000 The company's income statement, reflecting actual sales of 129,000 units, follows. Sales Variable Costs $1,935,000 352,600 216,400 465,800 110,500 1,145,300 789,700 Direct material Direct labor Overhead Shipping Total variable costs Contribution margin Fixed Costs Overhead 24,000 15,000 10,100 9,000 58,100 731,600 Rent Insurance Advertising Total fixed costs Operating income Required Prepare a performance report for Janovi showing both the flexible budget and sales volume variances.

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Solution Since the CEO decided the companys best alternative was a budget based on 120000 units the ... View the full answer