Acc 202 15-18
P15-18
Todhunter Publications established the following standard price and costs for a hardcover picture book that the company produces. a) Master Budget Number of units 30,000 Sales prices 36 Sales revenue 1,080,000 Variable manufacturing costs Materials 9.00 (270,000) Labor 4.50 (135,000) Overhead 6.30 (189,000) Variable G,S,&A 7.20 (216,000) Contribution margin 270,000 Fixed costs Manufacturing (135,000) General, selling & adm. (54,000) Net income 81,000 b) Flexible Budgets Number of units 29,000 31,000 Sales prices 36 Sales revenue 1,044,000 1,116,000 Variable manufacturing costs Materials 9.00 (261,000) (279,000) Labor 4.50 (130,500) (139,500) Overhead 6.30 (182,700) (195,300) Variable G,S,&A 7.20 (208,800) (223,200) Contribution margin 261,000 279,000 Fixed costs Manufacturing (135,000) (135,000) General, selling & adm. (54,000) (54,000) Net income 72,000 90,000 c) & d) Number of units 30,000 31,000 Master Flexible Volume Sales Price Budget Budget Variances Sales revenue 36.00 1,080,000 1,116,000 36,000 F Variable manufacturing costs Materials 9.00 (270,000) (279,000) 9,000 U Labor 4.50 (135,000) (139,500) 4,500 U Overhead 6.30 (189,000) (195,300) 6,000 U Variable G,S,&A 7.20 (216,000) (223,200) 7,200 U Contribution margin 270,000 279,000 9,000 F Fixed costs Manufacturing (135,000) (135,000) 0 G,S,&A (54,000) (54,000) 0 Net income 81,000 90,000 9,000 F e)
The volume variances can be used to
Todhunter Publications established the following standard price and costs for a hardcover picture book that the company produces. a) Master Budget Number of units 30,000 Sales prices 36 Sales revenue 1,080,000 Variable manufacturing costs Materials 9.00 (270,000) Labor 4.50 (135,000) Overhead 6.30 (189,000) Variable G,S,&A 7.20 (216,000) Contribution margin 270,000 Fixed costs Manufacturing (135,000) General, selling & adm. (54,000) Net income 81,000 b) Flexible Budgets Number of units 29,000 31,000 Sales prices 36 Sales revenue 1,044,000 1,116,000 Variable manufacturing costs Materials 9.00 (261,000) (279,000) Labor 4.50 (130,500) (139,500) Overhead 6.30 (182,700) (195,300) Variable G,S,&A 7.20 (208,800) (223,200) Contribution margin 261,000 279,000 Fixed costs Manufacturing (135,000) (135,000) General, selling & adm. (54,000) (54,000) Net income 72,000 90,000 c) & d) Number of units 30,000 31,000 Master Flexible Volume Sales Price Budget Budget Variances Sales revenue 36.00 1,080,000 1,116,000 36,000 F Variable manufacturing costs Materials 9.00 (270,000) (279,000) 9,000 U Labor 4.50 (135,000) (139,500) 4,500 U Overhead 6.30 (189,000) (195,300) 6,000 U Variable G,S,&A 7.20 (216,000) (223,200) 7,200 U Contribution margin 270,000 279,000 9,000 F Fixed costs Manufacturing (135,000) (135,000) 0 G,S,&A (54,000) (54,000) 0 Net income 81,000 90,000 9,000 F e)
The volume variances can be used to