Q1) Target Company's actual results for period were:
| Sales Volume (in units): |
400,000 |
|
| |
|
|
| Sales Revenues |
$2,440,000 |
|
| Variable Costs: |
|
| Manufacturing |
$1,060,000 |
|
| Mktg & Admin |
748,000 |
1,808,000 |
| Contribution Margin |
632,000 |
|
| Fixed Costs: |
|
| Manufacturing |
400,000 |
|
| Mktg & Admin |
200,000 |
600,000 |
| Operating Profit |
32,000 |
|
Company originally planned to make and sell 350,000 at $6 each. At that volume variable manufacturing costs were budgeted at $2.50, and variable marketing and administrative costs were budgeted at $2.00 each. Additionally, company expected the operating profit of $25,000.
A. In tabular format, recreate master budget and make the flexible budget.
B. Compute sales-volume variance, sales price variance, and total fixed cost variance.