First two pictures involves the numbers that will be used in questions one through six which in picture three.
A B C D E 18 19 Craft Inc. 20 Budgeted Contribution Income Statement 21 For Month of October 22 23 Sales $ 195,200 24 Less Variable costs 25 Variable cost of goods sold: 26 Direct materials 38,400 27 Direct labor 14,400 28 Manufacturing overhead 12,800 $ 65,600 29 30 Selling and distribution 36.000 (101,600) 31 Contribution Margin 93,600 32 33 Less Fixed Costs: 34 Manufacturing overhead 40,000 35 Selling and Distribution 30,000 (70,000) 36 37 Net Income 23,600 38 39 40 Craft Inc. 41 Actual Contribution Income Statement 42 For Month of October 43 44 Sales $ 230,000 45 Less Variable costs 46 Variable cost of goods sold: 47 Direct materials $ 40,000 48 Direct labor 15,000 49 Manufacturing overhead 13,500 $ 68,500 50 51 Selling and distribution 39,000 (107,500) 52 Contribution Margin 122,500 53 54 Less Fixed Costs: 55 Manufacturing overhead 39,000 56 Selling and Distribution 31,000 70,000) 57 58 Net Income(Loss) 52,500A l B 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 prot center. Presented below are the budgeted and actual contribution income statement for October along with applicable unit information. lalmlml\"l'l\"'l"l\"'k a _| d N 15 16 17 1R Budgeted unit information: Units 800 Sale price per unit $244 Direct material per unit $48 Direct labor per unit $18 Variable manufacturing overhead per unit $16 Variable selling and distribution per $45 Actual Units: 825 A B C D E F G H I J K L M N 4 68 1. Prepare a flexible budget performance report for Production that compares actual and allowed costs 69 Production Department 70 Flexible Budget Performance Report 71 For Month of October Flexible Flexible Budget Budget Designation 72 Actual costs Cost Variances U or F 73 Units 74 75 Direct Materials 76 Direct Labor 77 Variable Manufacturing overhead 78 Fixed Manufacturing 79 Total 80 81 82 2. Prepare a flexible budget performance report for selling and distribution that compares actual and allowed costs. 83 Selling and Distribution Cost Center 84 Flexible Budget Performance Report 85 For Month of October 86 Flexible Flexible Budget Budget Designation 87 Actual costs Cost Variances U or F 88 Units 89 90 Selling and Distribution: 91 Variable 92 Fixed 93 Total 94 95 96 3. Determine the revenue variance. 97 98 99 4. Determine the sales price variance. 100 101 102 5. Determine the sales volume variance. 103 104 105 6. Explain to management the areas that should be investigated. You should also include why the actual income is less than budgeted Explain why you picked these areas to look at. 106 107
