Answer:
BRUTUS COMPANY
FLEXIBLE BUDGET
Prouction unit <u> 32,000</u>
Direct Materials(3*32,000*$12) $1,152,000
Direct labor(5*32000*15) 2,400,000
Variable overhead(5*32000*2) <u> 320,000</u>
<u>3,872,000</u>
Explanation:
Answer:
Retained Earning (Dr.) $295,000
Stock Dividend Payable (Cr.) $295,000
To record stock dividend
Retained Earnings (Dr.) $157,800
Cash (Dr.) $157,800
To record cash dividend
Explanation:
Statement of Shareholder's Equity
Retained Earnings Beginning Jan 21 $1,275,000
Net Income $2,250,000
Cash Dividend $157,800
Stock Dividend $295,000
Retained Earning Ending $3,072,200
First, you'll want to break down each item:
Sale price of a bear - $35
Fixed cost - $1,500
Variable cost of a bear - $24
If she sells 275 bears next month we will determine:
Margin of safety in units
Margin of safety in sales dollars
Margin of safety as a percentage of sales
Next, we will determine the dollar amount of sales and costs by multiplying the units sold by the price sold/cost of good
275 x $35 = $9,625
275 x $24 = $6,600
Fixed costs = $1,500
To find the margin of safety as a percentage of sales we will subtract the breakeven point from the current sales level and then divide by the current sales level
(Current sales level - breakeven point)/current sales level
$9,625 - $8,100 (fixed costs + cost of good)/ $9,625 =
15.84% is the margin of safety as a percentage
To find the margin of safety in unites we will subtract the breakeven point from the current sales level and then divide by the price per unit sold
$9,625 - $8,100 / 35 = 43.57 units is the margin of safety as a unit
To find the margin of safety in sales dollars we will subtract the breakeven sales from actual sales
$9,625 - $8,100 = $1,525 is the margin of safety in sales dollars
You can also find the margin on sales as a percentage after finding the margin of safety in sales dollars by taking the margin of safety in sales dollars and dividing it by the actual sales and then multiplying it by 100.
$1,525/$9,625 = 0.1584 x 100 = 15.84%
Answer:
Avoidable costs
Explanation:
An avoidable cost is defined as one that an entity will not incur if a particular activity is not undertaken.
In business operations avoidable costs are usually variable costs. These are costs that vary or change in the cost of production. For example wages, cost of raw materials, and labour. These can be avoided depending on business needs.
Costs that are not avoidable are fixed cost. For example rent, insurance, and utilities.
These costs are paid wether production occurs or not.
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