Problem 16-51 (Algo) Solve for Master Budget Given Actual Results (LO 16-2, 4) A new accounting intern at Gibson Corporation lost the only copy of this period's master budget. The CFO wants to evaluate performance for this period but needs the master budget to do so. Actual results for the period follow. 130,000 units $873,600 Sales volume Sales revenue Variable costs Manufacturing Marketing and administrative Contribution margin Fixed costs Manufacturing Marketing and administrative Operating profit 192, 192 78,624 $602,784 238, 720 141, 940 $222, 124 1 The company planned to produce and sell 105,300 units for $6.00 each. At that volume, the contribution margin would have been $442,260. Variable marketing and administrative costs are budgeted at 10 percent of sales revenue. Manufacturing fixed costs are estimated at $2.40 per unit at the normal volume of 105,300 units. Management notes, "We budget an operating profit of $1.00 per unit at the normal volume." Required: a. Construct the master budget for the period. b. Prepare a profit variance analysis. Required A Required B Construct the master budget for the period. (Do not round intermediate calculations.) units GIBSON CORPORATION Master Budget Sales volume 105,300 Sales revenue $ 631,800 Variable costs: Manufacturing 146,360 % Marketing and administrative 63,180 Contribution margin $ 422,260 Fixed costs: Manufacturing 252,720 Marketing and administrative 64,240 Operating profit $ 105,300 Required A Required B Prepare a profit variance analysis. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) GIBSON CORPORATION Profit Variance Analysis Marketing and Administrative Sales Price Variance Variances $ 93,600 F Manufacturing Variances Actual Flexible Budget Sales Activity Variance Master Budget $ 873,600 $ 780,000 $ 148.200 F $ 631,800 $ 11,501 |U 192,192 78,624 624 U Sales revenue Variable costs: Manufacturing Marketing and administrative Contribution margin Fixed costs: Manufacturing Marketing and administrative Operating profit OO 180,691 78,000 521,309 $ 34,331 X U 14,820U 99,049 X F OOO 146,360 X 63,180 422.260 602.784 11,501 4U $ 624U $ 93,600 F $ 14,000 F lo 238,720 141.940 222.124 252.720 64,240 X 204,349 X $ 79,700 X U 80,324 x U 252,720 64,240 x 105,300 $ 2,499 X F $ $ 93,600F $ 99.049 XF $