Here is the rest of the question: FINE METALS, INC. Gold Investment Data Silver
ID: 2793542 • Letter: H
Question
Here is the rest of the question:
FINE METALS, INC. Gold Investment Data Silver Investment Data Silver Industrial Data Budget Actual Budget Actual Budget Actual Sales in ounces Average price per ounce Variable acquisition costs per ounce Fixed acquisition costs Varlable SG&A; costs per ounce Fixed SG&A; costs 1,200,000 1,580.00 35.00 $250,000,000.00 40.50 s 40,000,000.00 1,150,000 1,490.00 38.75 $257,500,000.00 42.00 45,000,000.00 2,500,000 26.25 10.00 $10,500,000.00 12.00 3,750,000.00 2,850,000 26.50 11.00 12,000,000.00 12.50 3,500,000.00 3,425,000 26.25 9.00 $20,500,000.00 10.00 4,250,000.00 3,500,000 26.50 9.25 $19,500,000.00 9.50 4,500,000.00Explanation / Answer
F
c) considering Gold Investment the Budgetary sales are high but actual sales are low even though actual cost is more than budget cost. so the performance of gold is ineffective.
while silver investment and silver industries are performed well in improvement over budget analysis.
a) Preparation of Income Statement Income Statement of FINE METAL.INC Particulars Gold Investment Silver Investment Silver Industry Budget Actual Budget Actual Budget Actual (Amount in $ ) (Amount in $ ) (Amount in $ ) (Amount in $ ) (Amount in $ ) (Amount in $ ) Revenue : Sales (A) 1,896,000,000 1,713,500,000 65625000 75525000 89906250 92750000 (12,00,000*$1580) (11,50,000*$1490) (25,00,000*$26.25) (28,50,000*$26.50) (34,25,000*$26.25) (35,00,000*26.50) Variable Cost (B) 42,000,000 44,562,500 25,000,000 31,350,000 30,825,000 32,375,000 (12,00,000*$35) (11,50,000*$38.75) (25,00,000*$10) (28,50,000*$11) (34,25,000*$9) (35,00,000*9.25) Fixed cost(C ) 250,000,000 257,500,000 10,500,000 12,000,000 20,500,000 19,500,000 Gross Revenue(A-B-C) 1,604,000,000 1,411,437,500 30,125,000 32,175,000 38,581,250 40,875,000 Selling and Administration expenses : Variable 48,600,000 48,300,000 30,000,000 35,625,000 34,250,000 33,250,000 (1200000*$40.5) (11,50,000*$42) (25,00,000*$12) (28,50,000*$12.50) (34,25,000*$10) (35,00,000*9.50) Fixed 40,000,000 45,000,000 3,750,000 3,500,000 4,250,000 4,500,000 Net Revenue / Net profit 1,515,400,000 1,318,137,500 (3,625,000) (6,950,000) 81,250 3,125,000 b) Flexible Budget Variance Flexible Budget Variance = Actual Results - Budgeted Results Particulars Gold Investment Actual Budget Variance Favarouble (F) (Amount in $ ) (Amount in $ ) or Unfavarouble (U) Revenue : Sales (A) 1,713,500,000 1,896,000,000 (182,500,000) U Variable Cost (B) 44,562,500 42,000,000 2,562,500 U Fixed cost(C ) 257,500,000 250,000,000 7,500,000 U Gross Revenue(A-B-C) 1,411,437,500 1,604,000,000 (192,562,500) U Selling and Administration expenses : Variable 48,300,000 48,600,000 (300,000) F Fixed 45,000,000 40,000,000 5,000,000 U Net Revenue / Net profit 1,318,137,500 1,515,400,000 (197,262,500) U Particulars Silver Investment Actual Budget Variance Favarouble (F) (Amount in $ ) (Amount in $ ) or Unfavarouble (U) Revenue : Sales (A) 75525000 65625000 9,900,000 F Variable Cost (B) 31,350,000 25,000,000 6,350,000 U Fixed cost(C ) 12,000,000 10,500,000 1,500,000 U Gross Revenue(A-B-C) 32,175,000 30,125,000 2,050,000 F Selling and Administration expenses : Variable 35,625,000 30,000,000 5,625,000 U Fixed 3,500,000 3,750,000 (250,000) F Net Revenue / Net profit (6,950,000) (3,625,000) (3,325,000) F Particulars Silver Industry Actual Budget Variance Favarouble (F) (Amount in $ ) (Amount in $ ) or Unfavarouble (U) Revenue : Sales (A) 92750000 89906250 2,843,750 F Variable Cost (B) 32,375,000 30,825,000 1,550,000 U Fixed cost(C ) 19,500,000 20,500,000 (1,000,000) F Gross Revenue(A-B-C) 40,875,000 38,581,250 2,293,750 F Selling and Administration expenses : Variable 33,250,000 34,250,000 (1,000,000) F Fixed 4,500,000 4,250,000 250,000 U Net Revenue / Net profit 3,125,000 81,250 3,043,750F