Question

Corporation sold laser pointers for $ 20 each in 2017. Its budgeted selling price was $ 24 per unit. Other information related to its performance is given​ below: Actual Budgeted Units made and sold 27,800 28,100 Variable costs $112,000 $2 per unit Fixed costs $54,000 $52,000 Calculate Click​'s flexible budget for​ (a) revenues,​ (b) variable​ costs, (c) fixed​ costs, and​ (d) operating income. Calculate Click​'s flexible budget for​ (a) revenues. Begin by determining the formula and then solve for the amount. ▼ x = Flexible budget for revenues x = Calculate Click​'s flexible budget for​ (b) variable costs. Begin by determining the formula and then solve for the amount. x = Flexible budget for variable costs x = Calculate Click​'s flexible budget for​ (c) fixed costs. Click's flexible budget for fixed costs is $ . Calculate Click​'s flexible budget for​ (d) operating income. Begin by determining the formula and then solve for the amount. ​(Abbreviations used: rev​ = revenue, vc​ = variable​ costs, fc​ = fixed​ costs.) Flexible budget for - - = operating income - - =

Answer 1

Solution

                                     Flexible           Actual          Budgeted

Unit sold                      27,800 units   27,800 units     28,100 units

                                       $                      $                           $

Sales price                  $ 24                  $ 20                   $ 24

                                 ----------------------------------------------------------

Total Revenue         667,200          556,000           674,400

Variable costs           55,600             112,000            56,200

                                                                                                                                                                                                          ($2 ×28,100)

                                 ------------------------------------------------------------

Contribution margin  611,600             444.000            618,200

Fixed costs                 52,000               54,000             52,000

                                    ---------------------------------------------------------- Operating Income     559,600         390,000           566,200

                                    ----------------------------------------------------------

Total cost                   107,600          1.66,000              108,200

cost per unit

(Total cost ÷ total units)   3.87                5.97                     3.85