Question

Assume Piedmont Computer Company has created a standard cost card for the PCC model tablet computer, with During the month of September, Piedmont Computer Company incurred the following costs while manufacturing 1,100 overhead allocated based on direct labor hours: PCC model tablets: (Click the icon to view the standard costs.) (Click the Icon to view the actual costs.) Read the requirements Requirement 1. Prepare a flexible budget for September for 900, 1,000, and 1,100 PCC model tablets. The tablet has a standard sales price of S675. List variable costs separately. Piedmont Computer Company Flexible Budget For the Month Ended September 30 i Standard Costs * Actual Costs Budget Amounts per Unit Direct materials Units 900 1,000 1,100 Direct labor Sales Revenue Direct materials $300 per tablet Direct labor 3 hours per tablet at $26 per hour Variable overhead 3 hours per tablet at $5 per hour Fixed overhead $54,000 per month S 341,000 88,000 17,600 56,320 Variable Costs: Variable overhead Fixed overhead Direct Materials Direct Labor Variable Overhead Print Done Print Done Total Variable Costs Contribution Margin Fixed Costs Operating Income

Answer 1

Solution

Piedmont Computer company
Flexible budget
Budget Amount Per unit
Units		900	1000	1100
Sales revenue	$ 675	$ 607,500	$   675,000	$    742,500
Variable costs
Direct material	$ 300	$ 270,000	$   300,000	$    330,000
Direct labor	$    78	$    70,200	$     78,000	$       85,800
Variable overhead	$    15	$    13,500	$     15,000	$       16,500
Total variable costs		$ 353,700	$   393,000	$    432,300
Contribution margin		$ 253,800	$   282,000	$    310,200
Fixed costs		$    54,000	$     54,000	$       54,000
Operating income		$ 199,800	$   228,000	$    256,200