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Crafts Inc., is a manufacturer of furniture. The company has 2 responsibility centers: Production and Selling and Distribution. Production and administration are cost centers while
Crafts Inc., is a manufacturer of furniture. | ||||||||||||
The company has 2 responsibility centers: Production and Selling and Distribution. | ||||||||||||
Production and administration are cost centers while Selling and Distribution is a profit center. | ||||||||||||
Presented below are the budgeted and actual contribution income statement for October along with applicable unit information. | ||||||||||||
Budgeted unit information: | ||||||||||||
Units | 900 | |||||||||||
Sale price per unit | $245 | |||||||||||
Direct material per unit | $48 | |||||||||||
Direct labor per unit | $18 | |||||||||||
Variable manufacturing overhead per unit | $16 | |||||||||||
Variable selling and distribution per unit | $45 | |||||||||||
Actual Units: | 850 | |||||||||||
Craft Inc. | ||||||||||||
Budgeted Contribution Income Statement | ||||||||||||
For Month of October | ||||||||||||
Sales | $ 220,500 | |||||||||||
Less Variable costs | ||||||||||||
Variable cost of goods sold: | ||||||||||||
Direct materials | $ 43,200 | |||||||||||
Direct labor | 16,200 | |||||||||||
Manufacturing overhead | 14,400 | $ 73,800 | ||||||||||
Selling and distribution | 40,500 | (114,300) | ||||||||||
Contribution Margin | 106,200 | |||||||||||
Less Fixed Costs: | ||||||||||||
Manufacturing overhead | 40,000 | |||||||||||
Selling and Distribution | 30,000 | (70,000) | ||||||||||
Net Income | 36,200 | |||||||||||
Craft Inc. | ||||||||||||
Actual Contribution Income Statement | ||||||||||||
For Month of October | ||||||||||||
Sales | $ 230,000 | |||||||||||
Less Variable costs | ||||||||||||
Variable cost of goods sold: | ||||||||||||
Direct materials | $ 46,000 | |||||||||||
Direct labor | 25,000 | |||||||||||
Manufacturing overhead | 20,000 | $ 91,000 | ||||||||||
Selling and distribution | 39,000 | (130,000) | ||||||||||
Contribution Margin | 100,000 | |||||||||||
Less Fixed Costs: | ||||||||||||
Manufacturing overhead | 38,000 | |||||||||||
Selling and Distribution | 40,000 | (78,000) | ||||||||||
Net Income(Loss) | 22,000 | |||||||||||
Required: | ||||||||||||
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