Question

Help Sa Saved Campbell Publications established the following standard price and costs for a hardcover picture book that the company produces Standard price and variable costs $ 36.3e 8.90 3.60 5.40 Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs 6.50 Planned fixed costsS $131,00e 53,000 Manufacturing overhead Selling, general, and administrative Campbell planned to make and sell 36,000 copies of the book Required a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements assuming production volumes of 35,000 and 37,000 units. Determine the sales and variable cost volume variances, assuming volun is actually 37,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) Volume Variances Master Budget 36,000 Flexible Budgets 37,000 35,000 Number of units Sales revenue

Answer 1

Flexible Budget variance				master	Flexible budget		Volume variance
				budget
number of units				36,000	35,000	37,000
Sales revenue				1306800	1270500	1343100	36300	F
Variable manufacturing costs
Materials				320400	311500	329300	8900	U
labor				129600	126000	133200	3600	U
overhea				194400	189000	199800	5400	U
Selling,general & administrative costs				234000	227500	240500	6500	U
contribution margin				428400	416500	440300	11900	F
fixed costs
manufacturing overhead				131,000	131,000	131,000	0	F
Selling,general & administrative costs				53,000	53,000	53,000	0	U
Net income				244,400	232,500	256,300	11900	F