Refer to the information in Problem 23-1B. Toho Company reports actual amounts for the year below. Actual sales were 24,000 units.

Required

Prepare a flexible budget performance report for the year.

Problem 23-1B

Toho Company reports the following fixed budget. It is based on an expected production and sales volume of 20,000 units.

Required

1. Classify all items listed in the fixed budget as variable or fixed. For variable costs, determine their amounts per unit. For fixed costs, determine their amounts for the year.
2. Prepare flexible budgets (see Exhibit 23.3) at sales volumes of 18,000 and 24,000 units.
3. The company’s business conditions are improving. One possible result is a sales volume of 28,000 units. Prepare a simple budgeted income statement (as in Exhibit 23.1) if 28,000 units are sold.

Exhibit 23.1

Exhibit 23.3

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Sales (24,000 units) .. $3,648,000 Costs Direct materials. Direct labor...... 1,400,000 360,000 Sales staff commissions 60,000 Depreciation-Machinery 250,000 Supervisory salaries... 219,000 Shipping.... 214,000 Sales staff salaries (fixed annual amount) 162,000 ... Administrative salaries ... 450,000 Depreciation-Office equipment 140,000 Income $ 393,000