ACCT $254$

Flexible Budget and Actual Results Comparison Assignment

Douglas Company provided the following budgeted information for $2014.$

$\backslash$table$[[$Sales price,$$50$ per unit$],[$Variable manufacturing cost,$32$ per unit$],[$Fixed manufacturing cost,$$100,000$ total$],[$Fixed selling and administrative cost,$$40,000$ total$]]$

Douglas predicted that sales would be $20,000$ units, but the sales actually were $22,000$ units. The actual sales price was $$48\mathrm{.}50$ per unit, and the actual variable manufacturing cost was $$33$ per unit. Actual fixed manufacturing cost and fixed selling and administrative cost were $$104,000$ and $$39,000,$ respectively.

Required:

$($a$)$ Using the form below, prepare a flexible budget; show actual results; calculate the flexible budget variances; and indicate whether the variances are favorable $($F$)$ or unfavorable $($U$).$ Flexible Budget Actual Results Flex Budget Var Favorable or Unfavorable

# of Units

Sales Rev

Var Man Costs

CM

Fixed Man Costs

Fixed S&A

Net Income

$($b$)$ Assess the company's performance compared to the flexible budget.