Question

Grenada Arts is a small business owned by Aquani Tamosi who creates art objects with sea themes. She sells the art object with sea themes. She sells the art objects through a local art gallery. Tamosi used the following data to prepare a master budget for

February:

Sales (units) 300u

Selling price per unit 85.00 $/u

Direct material cost per unit 8.30 $/u

Direct labor cost per unit . 27.00 $/u

Commission to art gallery- cost per unit 8.50 $/u

Fixed cost (total) 4,000 $

As it turns out , Tamosi was able to make and sell 310 art objects in February. Grenada Art's actual result of operations for February are as follow:

Sales Revenues 26,040$

Direct materials 3,062$

Direct Labor 8,290$

Commission to art galley 2,510$

Fixed cost 3,840$

REQUIRED:

Prepare a flexible budget for the production and sale of 310 art objects in February.

(include columns for Flexible, Actual, Variance and Unfavorable or Favorable)

Answer 1