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1.) 2.) 3.) Vernon Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable
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Vernon Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative $ 36.80 8.50 3.80 5.70 6.30 $126,000 45,000 Vernon planned to make and sell 32,000 copies of the book. Required: a.-d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 31,000 and 33,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 33,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) Master Budget Flexible Budgets Volume Variances Number of units 32,000 31,000 33,000 Variable manufacturing costs 0 0 01 Fixed costs $ 0 $ 0 $ 01 Benson Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative $ 36.60 8.20 3.70 5.30 7.00 $130,000 49,000 Assume that Benson actually produced and sold 26,000 books. The actual sales price and costs incurred follow: $ Actual price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Actual fixed costs Manufacturing overhead Selling, general, and administrative 35.60 8.40 3.60 5.35 6.80 $115,000 55,000 Required a. & b. Determine the flexible budget variances and also indicate whether each variance is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) Flexible Budget Variances Sales revenue Variable manufacturing costs Materials Labor Overhead Variable selling, general, and administrative costs Contribution margin Fixed costs Manufacturing overhead Selling, general, and administrative costs Net income Benson Corporation's balance sheet indicates that the company has $530,000 invested in operating assets. During the year, Benson earned operating income of $56,180 on $1,060,000 of sales. Required a. Compute Benson's profit margin for the year. b. Compute Benson's turnover for the year. c. Compute Benson's return on investment for the year. d. Recompute Benson's ROI under each of the following independent assumptions: (1) Sales increase from $1,060,000 to $1,272,000, thereby resulting in an increase in operating income from $56,180 to $69,960. (2) Sales remain constant, but Benson reduces expenses, resulting in an increase in operating income from $56,180 to $58,300. (3) Benson is able to reduce its invested capital from $530,000 to $424,000 without affecting operating income. Complete this question by entering your answers in the tabs below. Req A to C Req D Compute Benson's profit margin, turnover and return on investment for the year. (Round "Profit margin" and "Return on investment" to 1 decimal place (i.e., 0.234 should be entered as 23.4).) % a. Profit margin b. Turnover times c. Return on investment %Step by Step Solution
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