Question Details

Prepare a flexible budget performance report 



1.A product has a sales price of $20. Based on a 15,000-unit production level, the variable costs are $12 per
unit and the fixed costs are $6 per unit. Using a flexible budget for an actual production and sales level of
18,000 units, what is the budgeted operating income?
2.Thomas Co. provides the following fixed budget data for the

Sales (20,000 units)……………………….		$600,000
Cost of sales:		
Direct materials……………………………	$200,000	
Direct labor…………………………………	   160,000	
Variable overhead………………………….	     60,000	
Fixed overhead………………………………	     80,000	  500,000
Gross profit……………………………		$100,000
Operating expenses:		
Fixed ……………………………….	$ 12,000	
Variable ……………………………	   40,000	52,000
Income from operations……………		$48 000
The company- actual activity for the year follows:		
Sales (21,000 units)………………………………		$651,000
Costs of goods sold:		
Direct materials……………………………	$231,000	
Direct labor………………………………..	168,000	
Variable overhead………………………	73,500	
Fixed overhead…………………	77,500	550,000
Gross profit		$101,000
Operating expenses:		
Fixed ……………………	12,000	
Variable……………………………..	39,500	51,500
Income from operations……………………		$ 49,500

year:
Required: Prepare a flexible budget performance report for the year using the contribution margin
format.




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