The master budget for the year just ended was on

The master budget for the year just ended was on a computer that was just hacked. You feel responsible because you didn’t install anti-hacking software on the computer and you didn’t have a backup file. Rather than admit your mistake to your supervisor, you are trying to reconstruct the budget. You have learned the following information about the actual results.

Sales volume .................................180,000 units
Sales revenue .............................$963,000
Variable costs:
Manufacturing .............................324,000
Marketing and administrative ......90,000
Fixed costs:
Manufacturing .............................239,000
Marketing and administrative .....84,000
Operating profit ........................$226,000

You know that the company planned to sell 162,000 units at a price of $5 each. Variable marketing and administrative costs are budgeted at 12 percent of revenue. You have discovered that the manufacturing fixed costs are budgeted to be $1.50 per unit at the budgeted volume. You know that the company policy is to budget for an operating profit of one dollar per unit.
Finally, you recall that the master budget for fixed marketing and administrative costs is $81,000.


Required
Prepare a report explaining the differences between the actual results, flexible budget, and the master budget.

Related Book For answer-question

Fundamentals of Cost Accounting

6th edition

Authors: William N. Lanen, Shannon Anderson, Michael W Maher

ISBN: 978-1259969478

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