XYZ manufactured 30,000 units of product in 20x1 Costs were as follows Direct Materials $120,000 Direct Labor $240,000 Variable Overhead $120,000 Fixed Overhead $360,000 Additionally the company had $300,000 of SGA of which 50 was fixed and 50 was variable The company sold 25,000 units for $52 each Ignore taxes Prepare an absorption costing (traditional) income statement and compute ending inventory for 20x1 (10 points) Show a contribution margin (CVP) income statement and compute ending inventory for 20x1 (10 points) Using the base information above, show a flex budget income statement (no inventory) for next year (20x2) in variable costing format based on units sold Assume price will increase to $53 per unit All other costs remain consistent with the prior year Calculate for scenarios for 25,000 units, 30,000 units and 35,000 units sold (10 points) The company actually sold 27,000 units at $52 50 in 20x2 Variable production costs were $425,000 Variable SGA was $165,000 Fixed production was $350,000 and fixed SGA was $110,000 Prepare a flex budget report with variances (indicate favorable or unfavorable) (10 points)

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 05, 2024

XYZ manufactured 30,000 units of product in 20x1. Costs were as follows:

Direct Materials - $120,000

Direct Labor - $240,000

Variable Overhead - $120,000

Fixed Overhead $360,000.

Additionally the company had $300,000 of SGA of which 50% was fixed and 50% was variable.

The company sold 25,000 units for $52 each. Ignore taxes.

Prepare an absorption costing (traditional) income statement and compute ending inventory for 20x1. (10 points)
Show a contribution margin (CVP) income statement and compute ending inventory for 20x1.(10 points)
Using the base information above, show a flex budget income statement (no inventory) for next year (20x2) in variable costing format based on units sold. Assume price will increase to $53 per unit. All other costs remain consistent with the prior year. Calculate for scenarios for 25,000 units, 30,000 units and 35,000 units sold. (10 points).
The company actually sold 27,000 units at $52.50 in 20x2. Variable production costs were $425,000. Variable SGA was $165,000. Fixed production was $350,000 and fixed SGA was $110,000. Prepare a flex budget report with variances (indicate favorable or unfavorable). (10 points).