Refer to the information in Problem 8-1B. Tohono Company's actual income statement for 2015 follows. In Problem
Question:
In Problem 8-1B
Tohono Company's 2015 master budget included the following fixed budget report. It is based on an expected production and sales volume of 20,000 units.
Required
1. Prepare a flexible budget performance report for 2015.
Analysis Component
2. Analyze and interpret both the
(a) Sales variance and
(b) Direct materials cost variance.
Transcribed Image Text:
Statement of Income from Operations For Year Ended December 31, 2015 Sales (24,000 units) Cost of goods sold $3.648,000 Direct materials Direct labor Machinery repairs (variable cost) $1.400,000 360,000 60,000 250,000 218,000 Utilities (variable cost, $64,000) Plant manager s alaries Gross proft Selling expenses I,205,000 90,000 124,000 162,000 Sales salary (annual) 376,000 General and administrative expenses Advertising expense 104,000 232,000 00,000 436,000 393,000 Income from operations TOHONO COMPANY Fixed Budget Report For Year Ended December 31,2015 Sales $3,000,000 Cost of goods sold $1.겨ǐOJIOM) 57,000 Pont Machinery repairs (variable cost) lhiliics (25% is wilek:.IN).- Plant manager salaries 40,000 2,107,000 893,000 Selling expenses 116,000 Sales salary (fixed annual amount). General and administrative expenses Salis . . 'MIJH . Entertainment expense 90,000412000 Income from operations $ 125,000
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