Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Adarmes Adventures manufactures aluminum canoes. In planning for the coming year, CFO Alexis King is considering three different sales targets: 2,500 canoes, 3,000 canoes, and

Adarmes Adventures manufactures aluminum canoes. In planning for the coming year, CFO Alexis King is considering three different sales targets: 2,500 canoes, 3,000 canoes, and 3,500 canoes. Canoes sell for $800 each. The standard variable cost information for a canoe is as follows.

Direct materials $ 300
Direct labor 150
Variable overhead
Utilities 35
Indirect material 30
Indirect labor

60
Total $ 575

Annual fixed overhead cost is expected to be:

Maintenance $ 20,000
Depreciation 40,000
Insurance 27,000
Rent

30,000
Total $ 117,000

Alexis King chose to prepare a static budget based on sales of 3,000 canoes. Actual sales were 3,100 canoes at a price of $850 each. The company incurred the following costs for the year:

Direct material $ 910,000
Direct labor 435,000
Variable overhead 398,000
Fixed overhead

125,000
Total $ 1,868,000

Prepare a performance report for the year that shows the flexible budget and sales volume variances.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Automotive Audits Principles And Practices

Authors: D. H. Stamatis

1st Edition

0367696592, 978-0367696597

More Books

Students also viewed these Accounting questions

Question

What is biostatistics?

Answered: 1 week ago