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Engineworks Co. provides the following fixed budget data for the year: Sales (20,000 units) ……………………………. $600,000 Cost of sale

marysya [2.9K]

Answer:

Flexible Contribution Margin 147,000

Actual Contribution Margin 139,000

Variance 8000 unfavorable

Explanation:

Engine Works Company

Flexible Budget Performance Report

For the year using the Contribution Margin Format

Actual Static Flexible

(21,000 units) (20,000 units) (21,000 units)

Sales …$651,000 $600,00 630,000 Fav

V. Cost of goods sold: 512,000 $ 460,000 483,000 Unfav

Direct materials .$231,000 $200,000 210,000

Direct labor 168,000 160,000 168,000

Variable overhead 73,500 60,000 63,000

Variable Operating Expenses 39,500 40,000 42,000

Contribution Margin $139,000 140,000 147,000 Unfav

Fixed Expenses

Fixed Operating Expenses 12,000 12000 12000

Fixed overhead 77,500 80,000 84,000

Income from operations $ 49,500 $ 48,000 $51,000 Fav

Working

Flexible Calculations = (600,000/20,000)*21,000= $ 630,000

V. Cost of goods sold= ($ 460,000 /20,000)*21,000= 483,000

Direct materials . = $200,000 /20,000)*21,000= 210,000

Direct labor = 160,000/20,000)*21,000= 168,000

Variable overhead = 60,000 /20,000)*21,000= 63,000

Variable Operating Expenses = 40,000 /20,000)*21,000= 42,000

All calculations are carried out in the same way. Dividing the amount in the given budget with the number of units and multiplying it with actual number of units.

Flexible Contribution Margin 147,000 and Actual Contribution Margin 139,000 which shows a Variance of 8000 which is unfavorable.

4 0

3 years ago

You and your friends have decided to build a skateboard ramp behind your house. You have already purchased $500 in materials and

alexandr402 [8]

Answer:

(a) $500

(b) $620

(c) $180

(d) $72

Explanation:

Explicit costs refers to the which are incurred during running the business and these costs affects the profitability of the company.

Implicit costs refers to the opportunity cost of selecting some other alternative.

(a) Here, the explicit cost is the cost of purchasing materials = $500

(b) If I rent an electric saw, then the explicit cost is as follows:

= Purchasing cost of material + (Rent × No. of hours to build ramp)

= $500 + ($20 × 6 )

= $500 + $120

= $620

(c) If I use a handsaw, then the implicit cost is as follows:

= Hours to build ramp × A job pays $12 per hour

= 15 × $12

= $180

(d) If I rent an electric saw, then the implicit cost is as follows:

= Hours to build ramp × A job pays $12 per hour

= 6 × $12

= $72

4 0

3 years ago

Krysel inc. is expecting a new project to start producing cash flows, beginning at the end of this year. they expect cash flows

Helen [10]

FW = PW×(1.092)^n = $4,429,045.62

5 0

3 years ago

A verb associating two nouns in a business rule translates to a(n) ____ in the data model. group of answer choices relationship

Elza [17]

Answer: Relationship

Explanation:

4 0

2 years ago

Carla Vista Company sells product 2005WSC for $130 per unit. The cost of one unit of 2005WSC is $127, and the replacement cost i

Alexxx [7]

Answer:

Product 2005WSC should be reported at $127

Explanation:

Using the lower-of-cost-or-market, Carla Vista Company reports its Inventory at the lower of cost and net realizable value at the end of its financial period.

Cost per unit of 2005WSC is $ 127 (given)

Net realizable value per unit of 2005WSC is :

Selling Price ( $127 × 1.40) $177.80

Less Estimated Cost to Sell ($6.00)

Net realizable value $ 171.80

Conclusion :

Therefore, the lower is Cost at $127

Thus product 2005WSC is measured at $127

7 0

3 years ago