Margie’s Creations manufactures ceramic figurines. In planning for the coming year, the budget committee is considering...
Margie’s Creations manufactures ceramic figurines. In planning for the coming year, the budget committee is considering three different sales targets: 5,400 figurines, 6,500 figurines, and 7,600figurines. Figurines sell for $43 each. The standard cost information for one figurine is as follows:
| Direct materials | $6 | |
| Direct labor | $9 | |
| Variable overhead | $4 | |
| Variable operating costs | $2 | |
| Annual expected fixed overhead cost | $3,670 | |
| Annual expected fixed operating costs | $41,400 |
Prepare a flexible budget for the three sales levels under
consideration.
| 5,400 Units | 6,500 Units | 7,600 Units |
Homework Answers
| 5,400 units | 6,500 units | 7,600 units | |
| Revenue @$43 each | $232,200 | $279,500 | $326,800 |
| Variable | |||
| Manufacturing cost @$19 | 102,600 | 123,500 | 144,400 |
| Operating cost @$2 each | 10,800 | 13,000 | 15,200 |
| Gross profit | $118,800 | $143,000 | $167,200 |
| Fixed | |||
| Overhead cost | 3,670 | 3,670 | 3,670 |
| Operating cost | 41,400 | 41,400 | 41,400 |
| Net income | $73,730 | $97,930 | $122,130 |
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