Question
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 $801 each. The standard variable cost information for a canoe is as follows. Direct materials $ 320 Direct labor 182 Variable overhead Utilities 35 Indirect material 30 Indirect labor 60 Total $ 627 Annual fixed overhead cost is expected to be: Maintenance $ 18,650 Depreciation 37,000 Insurance 26,420 Rent 29,250 Total $ 111,320 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 $851 each. The company incurred the following costs for the year: Direct material $ 969,800 Direct labor 536,600 Variable overhead 399,500 Fixed overhead 119,220 Total $ 2,025,120 Prepare a performance report for the year that shows the flexible budget and sales volume variances.
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