Epsilon Inc. manufactures and sells widgets. The company's budget for the month of July includes the following projections:

• Sales: 10,000 units at $20 per unit
• Direct Materials: $5 per unit
• Direct Labor: $3 per unit
• Variable Overhead: $2 per unit
• Fixed Overhead: $20,000

Actual results for July are as follows:

• Sales: 11,000 units at $22 per unit
• Direct Materials: $60,000
• Direct Labor: $35,000
• Variable Overhead: $22,000
• Fixed Overhead: $19,500

Prepare a flexible budget for Epsilon Inc. based on actual sales volume and analyze the company's performance by calculating and interpreting variances for direct materials, direct labor, and overhead costs.

85. Question 85: (Consolidated Financial Statements - Subsidiary Acquisition) Alpha Corporation acquired 80% of the outstanding shares of Beta Company on January 1, 20X1, for $500,000 in cash. The fair value of Beta Company's identifiable net assets was $600,000 at the acquisition date. Any excess of cost over the fair value of identifiable net assets is attributed to goodwill.

Prepare the journal entries to record the acquisition of Beta Company by Alpha Corporation. Subsequently, prepare the consolidation worksheet entries at December 31, 20X1, assuming Beta Company reported net income of $100,000 and paid dividends of $30,000 during the year.