Use the flexible budget prepared in P for the 29 000 unit
Use the flexible budget prepared in P for the 29,000-unit level of activity and the actual operating results listed below for the 29,000-unit level.
Required:
1. Prepare a performance report.
2. List the major reasons why the actual operating income at 29,000 units differs from the master budget operating income at 30,000 units in Figure.
3. Given the level at which the company operated, how was its cost control?
Item
Sales.......................................................................$4,200,000
Direct materials:
Lumber..................................................................... 565,000
Paint.......................................................................... 121,000
Direct labor:
Cutting....................................................................... 110,000
Assembly.................................................................... 71,200
Painting...................................................................... 44,600
Variable factory overhead.......................................... 122,250
Variable selling and administrative expense ............. 741,300
Fixed factory overhead.............................................. 154,435
Fixed selling and administrative expense.................. 770,200
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