Question
b) Dub's Records Stuff estimates its sales for the upcoming period and prepared the following budget: Units 25,000 Sales $20 Less variable costs: Manufacturing costs
-
b) Dub's Records Stuff estimates its sales for the upcoming period and prepared the following budget:
Units | 25,000 |
Sales | $20 |
Less variable costs: | |
Manufacturing costs | $3 |
Selling and administrative costs | $2 |
Contribution margin | $15 |
Less fixed costs: | |
Manufacturing costs | $14,000 |
Selling and administrative costs | $12,000 |
Net income | TBD |
Assuming the manager produced 190K in sales, 110K of total variable costs and 14K for total fixed costs for 15,000 units. Of these variable costs, 40K related to selling and administrative costs. Comment if these are favourable or unfavourable. Make sure to use full dollar impacts so it is clear to management the magnitude of any variances. Comment on if the manager has had a successful year.
-
1) The flex budget method (Give full values vs. per unit)
-
2) The static budget method (Give full budget vs. per unit)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started