Gundy Company expects to produce 1,234,080 units of Product XX in 2012. Monthly production is expected to range from 80,520 to 119,500 units. Budgeted variable manufacturing costs per unit are: direct materials $5, direct labor $6, and overhead $9. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $2. Prepare a flexible manufacturing budget for the relevant range value using 19,490 unit increments. (List variable costs before fixed costs.)

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Brief Exercise 21-4 Gundy Company expects to produce 1,234,080 units of Product XX in 2012. Monthly production is expected to range from 80,520 to 119,500 units. Budgeted variable manufacturing costs per unit are: direct materials $5, direct labor $6, and overhead $9. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $2. Prepare a flexible manufacturing budget for the relevant range value using 19,490 unit increments. (List variable costs before fixed costs.) Please fill in the figures for monthly Budget below BE21-4 Gundy Company Monthly Flexible Manufacturing Budget For the Year 2012 1 Activity level 2 Finished units 3 4 Variable Cost 5 Direct Labor 6 overhead 7 8 9 10 Total Variable Costs 11 Fixed Cost 12 Depreciation 13 Supervision 14 Total Fixed Costs 15 Total Cost 16 17 80,550 119.500 Brief Exercise 18-8 Meriden Company has a unit selling price of $760, variable costs per unit of $380, and fixed costs of $332,120. Compute the break-even point in units using the mathematical equation. Break-even point units Solution at Break even point : cost price = selling price cost = 380*n + 332,120 = 760 n n = 332,120 / 380 units = 874.0 Brief Exercise 18-10 For Turgo Company, variable costs are 56% of sales, and fixed costs are $187,100. Management's net income goal is $82,092. Compute the required sales in dollars needed to achieve management's target net income of $82,092. Contribution margin Ratio = 100% - Variable cost percentage = 100% - 56% = 44% Required sales to reach target income of $82,092 = (Total Fixed Cost +Target Income) / Contribution Margin Ratio $82,092 = ( $187,100 +$ 82,092) / 44% Required sales $ $ 611,800 Brief Exercise 18-11 For Kozy Company, actual sales are $1,114,000 and break-even sales are $735,240. Compute the margin of safety in dollars and the margin of safety ratio. Margin of safety $ = Total budgeted or actual sales Break even sales = $1,114,000 - $735,240 = $ 378,760 Margin of safety ratio % = Margin of safety in dollars / Total budgeted or actual sales = $378,760 / $1,114,000 = 34% Brief Exercise 19-16 Montana Company produces basketballs. It incurred the following costs during the year. Direct materials $14,248 Direct labor $25,442 Fixed manufacturing overhead $9,709 Variable manufacturing overhead $31,921 Selling costs $21,138 What are the total product costs for the company under variable costing? Total product costs $ Direct Materials $ Direct labour $ Variable manufacturin $ Total Product Costs $ 14,248.0 25,442.0 31,921.0 71,611.0 Exercise 19-17 Polk Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2012, the company incurred the following costs. Variable Cost per Unit Direct materials $7.73 Direct labor $2.52 Variable manufacturing overhead $5.92 Variable selling and administrative expenses $4.02 Fixed Costs per Year Fixed manufacturing overhead $239,522 Fixed selling and administrative expenses $247,303 Polk Company sells the fishing lures for $25.75. During 2012, the company sold 80,000 lures and produced 94,300 lures. (a) Assuming the company uses variable costing, calculate Polk's manufacturing cost per unit for 2012. (Round answer to 2 decimal places, e.g.10.50.) Direct Materials Direct labour Variable manufacturing overhead Manufacturing cost per unit $ $ $ $ $ 7.73 2.52 5.92 16.17 (b) Prepare a variable costing income statement for 2012. POLK COMPANY Income Statement For the Year Ended December 31, 2012 Variable Costing Sales Direct Materials $ Direct labour $ Variable manufacturing overhead $ Variable selling and administrative expenses $ Contribution Margin Fixed manufacturing overhead $ Fixed selling and administrative expenses $ Net Loss $ 2,060,000 618,400 201,600 473,600 321,600 $ $ 239,552 247,303 $ $ (1,615,200) 444,800 (486,855) (42,055) (c) Assuming the company uses absorption costing, calculate Polk's manufacturing cost per unit for 2012. (Round answer to 2 decimal places, e.g.10.50.) Direct Materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Manufacturing cost per unit $ $ $ $ $ $ 7.73 2.52 5.92 2.54 18.71 (d) Prepare an absorption costing income statement for 2012. POLK COMPANY Income Statement For the Year Ended December 31, 2012 Absorption Costing Sales Direct Materials $ Direct labour $ Variable manufacturing overhead $ Fixed manufacturing overhead $ Gross Profit Variable selling and administrative expenses $ Fixed selling and administrative expenses $ Net Loss $ 2,060,000 618,400 201,600 473,600 239,552 $ $ 321,600 247,303 $ $ (1,533,152) 526,848 (568,903) (42,055) Brief Exercise 21-1 For the quarter ended March 31, 2012, Maris Company accumulates the following sales data for its product, Garden-Tools: $326,000 budget; $332,000 actual. Prepare a static budget report for the quarter. MARIS COMPANY Sales Budget Report For the Quarter Ended March 31, 2012 Product Line Garden-Tools Budget $ 326,000 Actual $ 332,000 Difference $ (6,000) Brief Exercise 21-4 Gundy Company expects to produce 1,212,080 units of Product XX in 2012. Monthly production is expected to range from 80,900 to 118,500 units. Budgeted variable manufacturing costs per unit are: direct materials $5, direct labor $6, and overhead $9. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $2. Prepare a flexible manufacturing budget for the relevant range value using 21,050 unit increm 19.490 using GUNDY COMPANY Monthly Flexible Manufacturing Budget For the Year 2012 Units 80,520 Fixed Cost Depreciation Supevision Total Fixed Cost 402,600 483,120 724,680 1,610,400 $ 507,850 $ 609,420 $ 914,130 $ 2,031,400 606,420 303,210 909,630 $ $ $ $ $ $ $ Variable Cost Per unitcost Direct material $ 5 Direct labor $ 6 Overhead $ 9 Total Varibale Overhead 101,570 2,520,030 6 $2 Total Cost Working Depreciation $1,212,080 X$ 6 / 12 606,420 Supevision $1,212,840 X$3 / 12 303,210 119,500 $ $ $ $ 597,500 717,000 1,075,500 2,390,000 606,420 303,210 909,630 $ 606,420 303,210 909,630 $ 2,941,030 $ 3,299,630 $ Brief Exercise 18-8 Meriden Company has a unit selling price of $760, variable costs per unit of $380, and fixed costs of $332,120. Compute the break-even point in units using the mathematical equation. Break-even point units Solution at Break even point : cost price = selling price cost = 380*n + 332,120 = 760 n n = 332,120 / 380 units = 874.0 Brief Exercise 18-10 For Turgo Company, variable costs are 56% of sales, and fixed costs are $187,100. Management's net income goal is $82,092. Compute the required sales in dollars needed to achieve management's target net income of $82,092. Contribution margin Ratio = 100% - Variable cost percentage = 100% - 56% = 44% Required sales to reach target income of $82,092 = (Total Fixed Cost +Target Income) / Contribution Margin Ratio $82,092 = ( $187,100 +$ 82,092) / 44% Required sales $ $ 611,800 Brief Exercise 18-11 For Kozy Company, actual sales are $1,114,000 and break-even sales are $735,240. Compute the margin of safety in dollars and the margin of safety ratio. Margin of safety $ = Total budgeted or actual sales Break even sales = $1,114,000 - $735,240 = $ 378,760 Margin of safety ratio % = Margin of safety in dollars / Total budgeted or actual sales = $378,760 / $1,114,000 = 34% Brief Exercise 19-16 Montana Company produces basketballs. It incurred the following costs during the year. Direct materials $14,248 Direct labor $25,442 Fixed manufacturing overhead $9,709 Variable manufacturing overhead $31,921 Selling costs $21,138 What are the total product costs for the company under variable costing? Total product costs $ Direct Materials $ Direct labour $ Variable manufacturin $ Total Product Costs $ 14,248.0 25,442.0 31,921.0 71,611.0 Exercise 19-17 Polk Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2012, the company incurred the following costs. Variable Cost per Unit Direct materials $7.73 Direct labor $2.52 Variable manufacturing overhead $5.92 Variable selling and administrative expenses $4.02 Fixed Costs per Year Fixed manufacturing overhead $239,522 Fixed selling and administrative expenses $247,303 Polk Company sells the fishing lures for $25.75. During 2012, the company sold 80,000 lures and produced 94,300 lures. (a) Assuming the company uses variable costing, calculate Polk's manufacturing cost per unit for 2012. (Round answer to 2 decimal places, e.g.10.50.) Direct Materials Direct labour Variable manufacturing overhead Manufacturing cost per unit $ $ $ $ $ 7.73 2.52 5.92 16.17 (b) Prepare a variable costing income statement for 2012. POLK COMPANY Income Statement For the Year Ended December 31, 2012 Variable Costing Sales Direct Materials $ Direct labour $ Variable manufacturing overhead $ Variable selling and administrative expenses $ Contribution Margin Fixed manufacturing overhead $ Fixed selling and administrative expenses $ Net Loss $ 2,060,000 618,400 201,600 473,600 321,600 $ $ 239,552 247,303 $ $ (1,615,200) 444,800 (486,855) (42,055) (c) Assuming the company uses absorption costing, calculate Polk's manufacturing cost per unit for 2012. (Round answer to 2 decimal places, e.g.10.50.) Direct Materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Manufacturing cost per unit $ $ $ $ $ $ 7.73 2.52 5.92 2.54 18.71 (d) Prepare an absorption costing income statement for 2012. POLK COMPANY Income Statement For the Year Ended December 31, 2012 Absorption Costing Sales Direct Materials $ Direct labour $ Variable manufacturing overhead $ Fixed manufacturing overhead $ Gross Profit Variable selling and administrative expenses $ Fixed selling and administrative expenses $ Net Loss $ 2,060,000 618,400 201,600 473,600 239,552 $ $ 321,600 247,303 $ $ (1,533,152) 526,848 (568,903) (42,055) Brief Exercise 21-1 For the quarter ended March 31, 2012, Maris Company accumulates the following sales data for its product, Garden-Tools: $326,000 budget; $332,000 actual. Prepare a static budget report for the quarter. MARIS COMPANY Sales Budget Report For the Quarter Ended March 31, 2012 Product Line Garden-Tools Budget $ 326,000 Actual $ 332,000 Difference $ (6,000) Brief Exercise 21-4 Gundy Company expects to produce 1,212,080 units of Product XX in 2012. Monthly production is expected to range from 80,900 to 118,500 units. Budgeted variable manufacturing costs per unit are: direct materials $5, direct labor $6, and overhead $9. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $2. Prepare a flexible manufacturing budget for the relevant range value using 21,050 unit increm 19.490 using GUNDY COMPANY Monthly Flexible Manufacturing Budget For the Year 2012 Units 80,520 Fixed Cost Depreciation Supevision Total Fixed Cost 402,600 483,120 724,680 1,610,400 $ 507,850 $ 609,420 $ 914,130 $ 2,031,400 606,420 303,210 909,630 $ $ $ $ $ $ $ Variable Cost Per unitcost Direct material $ 5 Direct labor $ 6 Overhead $ 9 Total Varibale Overhead 101,570 2,520,030 6 $2 Total Cost Working Depreciation $1,212,080 X$ 6 / 12 606,420 Supevision $1,212,840 X$3 / 12 303,210 119,500 $ $ $ $ 597,500 717,000 1,075,500 2,390,000 606,420 303,210 909,630 $ 606,420 303,210 909,630 $ 2,941,030 $ 3,299,630 $ Brief Exercise 21-4 Gundy Company expects to produce 1,234,080 units of Product XX in 2012. Monthly production is expected to range from 80,520 to 119,500 units. Budgeted variable manufacturing costs per unit are: direct materials $5, direct labor $6, and overhead $9. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $2. Prepare a flexible manufacturing budget for the relevant range value using 19,490 unit increments. (List variable costs before fixed costs.) Please fill in the figures for monthly Budget below BE21-4 Gundy Company Monthly Flexible Manufacturing Budget For the Year 2012 1 Activity level 2 Finished units 3 4 Variable Cost 5 Direct Labor 6 overhead 7 8 9 10 Total Variable Costs 11 Fixed Cost 12 Depreciation 13 Supervision 14 Total Fixed Costs 15 Total Cost 16 17 80,550 119.500 BE21-4 Gundy Company Monthly Flexible Manufacturing Budget For the Year 2012 1 2 3 4 5 6 7 8 Activity level Finished units Variable Cost 80,520 100,010 119500 Direct Labor 402600 483120 500050 600060 overhead 724680 900090 597500 717000 107550 0 161040 0 200020 0 239000 0 483120 161040 644160 225456 0 600060 200020 800080 280028 0 717000 239000 956000 334600 0 materia l 9 10 11 12 13 14 Total Variable Costs Fixed Cost Depreciation Supervision Total Fixed Costs 15 16 17 Total Cost