Based on the reports, schedules, and budgets you have completed, what recommendations would you make to the managers of Armstrong Helmet Company?

Name 10. (9) ARMSTRONG HELMET COMPANY Budgeted Income Statement For the Month Ended December 31, 2013 Sales (8,000 X $40) $320,000 Cost of goods sold (8,000 X $15.13 (part 4) 121,040 Gross profit 198,960 Selling and administrative expenses 78,100 Income from operations 120,860 Income tax expense 54,387 Net income $66,473 11. ARMSTRONG HELMET COMPANY Monthly Flexible Manufacturing Costs Budget For the Month Ended December 31, 2013 Activity level Production in units 8,000 9,000 10,000 Variable costs Raw materials ($7) $56,000 $63,000 $70,D00 Wages ($7) 56,000 63,000 70,000 Miscellaneous ($0.10) 900 1,000 Total variable costs $112,800 $126,900 $141,000 Fixed costs ($11.309 (part 1) - $1.900 mise fvariable cool! Total fixed costs 10,300 10,30 10,300 Total costs $123,10 $137,200 $151,300 12. Potential causes of direct materials variance: employees Potential causes of a direct labor variance: change in pay rates Potential causes of a manufacturing overhead variance: change in use of supplies 13. Cashback payback period: Cost of capital investment / Net cash flow = $720,000 / ($30,400 (part 10f) = 23.68 months or approximately 2 years Based on the reports, schedules, and budgets you have completed, what recommendations would you make to the managers of Armstrong Helmet Company? Case 7 . Page 5 of 5