Question
I wanted to make sure I did this correctly. I need to do a Operating schedule. Actual results @ actual activity level Flexible budget varainces
I wanted to make sure I did this correctly. I need to do a Operating schedule.
Actual results @ actual activity level Flexible budget varainces Flexible Budget for actual activity Sales activity variances Static Budget
Units 20,120 20,120 -120 20,000
Sales 829,820 15,220 845,040 -5,040 840,000
Variable costs 743,000 -9,120 734,080 -4,080 730,000
Contribution Margin 86,620 24,340 110,960 -960 110,000
Fixed costs 57,850 -2,730 55,120 -120 55,000
Operating Income 28,770 27,070 55,840 -840 55,000
Flexible Budget varainace Total Sales Variances
27,070 -840
Total Static Budget variance
$26,230
With the information given below, I need help preparing a Operating Income Schedule for the month of July.
assume that the company produces a single product, sales are equal to production, and inventory levels are zero. Below are the standard costs per boot: Standard Quantity of Input allowed per unit of output Standard Price per unit of Input
Direct materials 3 pounds $3 per pound
Direct labor 1 hour $17 per hour
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Below is the budgeted information for the month of July: Units produced and sold 20,000 Average selling price per unit $42 Direct materials based on the standards per unit Direct labor based on the standards per unit Variable factory overhead per unit $5 per direct labor hour Fixed factory overhead $50,000 Variable shipping costs per unit $3 Variable selling cost per unit $1 Fixed selling costs $15,000 Fixed administrative costs $20,000
Below are the actual results for the month of July: Units produced and sold 20,120 Actual sales revenue (see table below by customer) $829,820 Direct materials (65,000 lbs used) $191,750 Direct labor (19,500 actual hours) $333,450 Variable factory overhead $103,000 Fixed factory overhead $54,000 Variable shipping costs * $61,000 Variable selling cost $19,850 Fixed selling costs $17,000 Fixed administrative costs $21,000 *include variable shipping costs in cost of goods sold when preparing the income statement Actual sales units and selling prices by customer for July: Units Selling Price Customer A 12,000 $39 per unit Customer B 5,850 $44 per unit Customer C 2,270 $46 per unit
| Cost Formula | Budget | Actual result | Flexible Budget | ||||
| Revenue | $42/unit | $ 8,40,000 | $ 8,29,820 | $ 8,45,040 | |||
| Cost of goods sold: | |||||||
| Direct materials | $9 per unit | $ 1,80,000 | $ 1,91,750 | $ 1,81,080 | |||
| direct labour | $17 per unit | $ 3,40,000 | $ 3,33,450 | $ 3,42,040 | |||
| Variable factory overhead | $5 per unit | $ 1,00,000 | $ 1,03,000 | $ 1,00,600 | |||
| Fixed factory overhead | $50000 | $ 50,000 | $ 54,000 | $ 50,000 | |||
| Variable shipping costs | $3 per unit | $ 60,000 | $ 61,000 | $ 60,360 | |||
| Cost of goods sold: | $ 7,30,000 | $ 7,43,200 | $ 7,34,080 | ||||
| Gross Income | $ 1,10,000 | $ 86,620 | $ 1,10,960 | ||||
| Other operating expenses | |||||||
| Varable selling cost | $1 per unit | $ 20,000 | $ 19,850 | $ 20,120 | |||
| Fixed selling costs | $15000 | $ 15,000 | $ 17,000 | $ 15,000 | |||
| Fixed Administrative costs | $20000 | $ 20,000 | $ 21,000 | $ 20,000 | |||
| Total Expenses | $ 55,000 | $ 57,850 | $ 55,120 | ||||
| Net Operating Profit (revenue - total expenses) | $ 55,000 | $ 28,770 | $ 55,840 |
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