Problem 1. (8 Points). Engineworks Co. provides the following fixed budget data for the year: Sales (20,000 units) Cost of sales: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Operating expenses: Fixed Variable Income from operations The company's actual activity for the year follows: Sales (21,000 units) Cost of goods sold: Direct materials Direct labor Variable overhead Fixed overhead $200,000 160,000 60,000 80,000 $12,000 40,000 $231,000 168,000 73,500 77,500 $651,000 550,000 $600,000 500,000 $100,000 52,000 $48.000

Problem 1. (8 Points). Engineworks Co. provides the following fixed budget data for the year: Sales (20,000 units).. $600,000 Cost of sales: Direct materials $200,000 Direct labor.... 160,000 Variable overhead 60,000 Fixed overhead 80,000 500,000 Gross profit. $100,000 Operating expenses: Fixed Variable. Income from operations. $12,000 40,000 52,000 $48.000 The company's actual activity for the year follows: Sales (21,000 units). $651,000 Cost of goods sold: Direct materials $231,000 Direct labor. 168,000 Variable overhead 73,500 Fixed overhead 77.500 550,000