Question

Use the flexible budget prepared in P for the 31,000-unit level and the actual operating results listed below for the 31,000-unit level.
Required:
1. Prepare a performance report.
2. List the major reasons why the actual operating income at 31,000 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..................................................................... $4,800,000
Direct materials:
Lumber................................................................. 633,000
Paint..................................................................... 127,500
Direct labor:
Cutting ................................................................ 115,200
Assembly.............................................................. 75,300
Painting................................................................ 47,100
Variable factory overhead.................................... 137,655
Variable selling and administrative expense........ 777,400
Fixed factory overhead........................................ 154,435
Fixed selling and administrative expense............ 765,800


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  • CreatedMarch 31, 2015
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