1. Using the budget data in the plant accountant?s report, how many motors would have to be sold for Waltham Motors Division to break even?

2. Using the budget data in the plant accountant?s report, compute the expected cost per unit based on the budgeted volume of 18,000 units.

a. Using this information, create an alternative budget based on the actual volume of 14,000.

b. Compute variances between this alternative budget and the actual figures given by the plant accountant.

Units Sales Variable manufacturing costs: Direct material Direct labor Indirect labor Idle time Cleanup time Miscellaneous supplies Total variable manufacturing cost Variable shipping costs Total variable costs Contribution margin Nonvariable manufacturing costs: Supervision Rent Depreciation Other Total nonvariable manufacturing costs Selling and administrative costs Total nonvariable and programmed costs Operating income (loss) Budget Actual Variance 4,000 18,000 14,000 $864,000 $686,000 $178,000 $108,000 $85,400 $22,600 288,000 246,000 42,000 57,600 44,400 13,200 14,400 14,200 10,800 10,000 5,200 4,000 1,200 $484,000 $404,000 $80,000 200 $28,800 $28,000 $800 $512,800 $432,000 $80,800 $351,200 $254,000 $97,200 112,000 112,000 800 $57,600 $58,800 $1,200 20,000 20,000 60,000 60,000 10,400 10,400 $148,000 $149,200 $1,200 $260,000 $261,200 91,200 -7,200 U -98,400 LLLLLLLLF F FF U U U $1,200 U U