Douglas Company provided the following budgeted information for the current year
ID: 2587736 • Letter: D
Question
Douglas Company provided the following budgeted information for the current year.
Required:
(a) Using the form below, prepare a flexible budget; show actual results; calculate the flexible budget variances; and indicate whether the variances are favorable (F) or unfavorable (U).
sales price $50 per unit
variable manufacturing cost. 32 per unit
fixed manufacturing cost $100,000 total
fixed selling and administrative cost $40,000 total
Flexible BudgetActual ResultsFlexible Budget F or u
22,000. 22,000
Number of units
Sales revenue
Variable manufacturing costs
Contribution margin
Fixed manufacturing costs
Fixed selling and administrative costs
Net Income
Explanation / Answer
Prepare Flexible budget:
Flexible budget No of units 22000 Sales revenue 1100000 Variable manufacturing cost (704000) Contribution margin 396000 Fixed manufacturing costs (100000) Fixed selling and administrative costs (40000) Net income 256000