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Prepare a static budget in Excel for Vroom-Vroom based on 200,000 units produced. (36 points) Show the static budget for December in Contribution Margin Income
Prepare a static budget in Excel for Vroom-Vroom based on 200,000 units produced. (36 points)
- Show the static budget for December in Contribution Margin Income Statement format.
- Compare Decembers static budget to Decembers actual results. Specify which line items are favorable or unfavorable and how much.
- For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for December. Provide potential explanations for each one.
- Show the static budget for January in Contribution Margin Income Statement format.
- Compare Januarys static budget to Januarys actual results. Specify which line items are favorable or unfavorable and how much.
- For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for January. Provide potential explanations for each one.
Budget for 200,000 Units | ||
Units per Month | 200,000 | |
Per Unit | Total | |
Selling Price | $59 | $ 11,800,000 |
Variable Costs: | ||
Raw Material | $24 | $4,800,000 |
Packaging Cost | $15 | $3,000,000 |
Electricity | $4 | $800,000 |
Waste and other costs | $6 | $1,200,000 |
Total Variable Costs | $49 | $9,800,000 |
Contribution Margin | $10 | $2,000,000 |
Fixed Costs: | ||
Salary & Wages | $350,000 | |
Fringe Benefits | $175,000 | |
Rent Cost | $750,000 | |
Insurance Cost | $50,000 | |
Depreciation Cost | $250,000 | |
Total Fixed Costs | $1,575,000 | |
December Actual | ||
Units | 275,000 | |
Revenue | $ 16,375,000 | |
Variable Costs: | ||
Raw Material | $ 6,450,000 | |
Packaging Cost | $ 4,150,000 | |
Electricity | $ 1,095,000 | |
Waste and other Costs | $ 1,775,000 | |
Total Variable Costs | $ 13,470,000 | |
Contribution Margin | $ 2,905,000 | |
Fixed Costs: | ||
Salary & Wages | $ 375,000 | |
Fringe Benefits | $ 175,000 | |
Rent Cost | $ 750,000 | |
Insurance Cost | $ 50,000 | |
Depriciation Cost | $ 250,000 | |
Total Fixed Costs | $ 1,600,000 | |
Net Income | $ 1,305,000 | |
Net Income | $2.12 | $425,000
|
January Actual |
150,000 |
$ 8,845,000 |
$ 3,450,000 |
$ 2,250,000 |
$ 575,000 |
$ 1,025,000 |
$ 4,195,000 |
$ 4,650,000 |
$ 345,000 |
$ 175,000 |
$ 750,000 |
$ 60,000 |
$ 250,000 |
$ 1,580,000 |
$ 3,070,000 |
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