Managers at Novak, Inc. were cautiously optimistic about receiving their bonuses at year-end. Periodic communications from the top noted that the sales team had been exceeding targets throughout the year, which led to steady production activity to keep pace. Managers knew that a company profit margin of 10% meant bonuses for everyone. The production crew had been managing costs well but wasn't sure where final costs would land with the sales volume higher than planned. The following information outlines actual and budgeted results for the year. Sales volume (units) Selling price DM cost/unit DL cost/unit Variable-MOH cost/unit Variable SG&A cost/unit Fixed-MOH cost Fixed SG&A cost Actual 52,200 $14.30 $3.40 $1.75 $1.50 $0.40 $200,000 $106,000 Master Budget 45,200 $13.80 $3.30 $1.80 $1.50 $0.40 $190,800 $101,600 Prepare Novak's flexible budget and actual income statement for the year. Sales volume Sales Variable costs: Direct materials Direct labor Variable-MOH Variable SG&A Fixed costs: Fixed-MOH Fixed SG&A Per unit Operating income $14.30 3.40 Contribution margin $7.25 1.75 1.50 0.40 GA GA Actual 52,200 746,460.00 177480.00 91350.00 78300.00 20880.00 378450.00 200000.00 106000.00 72450.00 LA $ GA Flexible Budget 52,200 720360.00 172260.00 93960.00 78300.00 20880.00 354960.00 190800.00 101600.00 62560.00 Per unit $13.80 3.30 1.80 1.50 0.40 $6.80 Determine the flexible budget variances and sales price variance, noting the amount and sign for each. Sales Variable costs: Direct materials Direct labor Variable-MOH Variable SG&A Contribution margin Fixed costs: Fixed-MOH Fixed SG&A GA Operating income $ Flexible Budget Variance 26100.00 5220.00 2610.00 78300 20800 23490.00 200000.00 106000.00 23490.00 Favorable Unfavorable Favorable Favorable Unfavorable Favorable Unfavorable Neither Favorable nor Unfavorable Favorable Did the company hit its target profit margin? (Round answers to 2 decimal places, e.g. 15.25%.) Profit margin The company did not hit Actual 9.71 % its 10% profit margin target. Flexible Budget 6.80 % Managers at Novak, Inc. were cautiously optimistic about receiving their bonuses at year-end. Periodic communications from the top noted that the sales team had been exceeding targets throughout the year, which led to steady production activity to keep pace. Managers knew that a company profit margin of 10% meant bonuses for everyone. The production crew had been managing costs well but wasn't sure where final costs would land with the sales volume higher than planned. The following information outlines actual and budgeted results for the year. Sales volume (units) Selling price DM cost/unit DL cost/unit Variable-MOH cost/unit Variable SG&A cost/unit Fixed-MOH cost Fixed SG&A cost Actual 52,200 $14.30 $3.40 $1.75 $1.50 $0.40 $200,000 $106,000 Master Budget 45,200 $13.80 $3.30 $1.80 $1.50 $0.40 $190,800 $101,600 Prepare Novak's flexible budget and actual income statement for the year. Sales volume Sales Variable costs: Direct materials Direct labor Variable-MOH Variable SG&A Fixed costs: Fixed-MOH Fixed SG&A Per unit Operating income $14.30 3.40 Contribution margin $7.25 1.75 1.50 0.40 GA GA Actual 52,200 746,460.00 177480.00 91350.00 78300.00 20880.00 378450.00 200000.00 106000.00 72450.00 LA $ GA Flexible Budget 52,200 720360.00 172260.00 93960.00 78300.00 20880.00 354960.00 190800.00 101600.00 62560.00 Per unit $13.80 3.30 1.80 1.50 0.40 $6.80 Determine the flexible budget variances and sales price variance, noting the amount and sign for each. Sales Variable costs: Direct materials Direct labor Variable-MOH Variable SG&A Contribution margin Fixed costs: Fixed-MOH Fixed SG&A GA Operating income $ Flexible Budget Variance 26100.00 5220.00 2610.00 78300 20800 23490.00 200000.00 106000.00 23490.00 Favorable Unfavorable Favorable Favorable Unfavorable Favorable Unfavorable Neither Favorable nor Unfavorable Favorable Did the company hit its target profit margin? (Round answers to 2 decimal places, e.g. 15.25%.) Profit margin The company did not hit Actual 9.71 % its 10% profit margin target. Flexible Budget 6.80 %