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3 years ago

PB11.

Business

1 answer:

lukranit [14]3 years ago

3 0

COMPLETE QUESTION IS AS UNDER:

LO 7.4 Prepare a flexible budgeted income statement for 47,000 units using the following information from a static budget for 45,000 units:

Sales price 50

DIRECT MATERIAL COST per unit 12

DIRECT LABOR COST per unit 5

VARIABLE MANUFACTURING overhead per unit 3

FIXED MANUFACTURING OH $25,000

VARIABLE SALES AND ADMINISTRATION COST per unit 3

FIXED SALES AND ADMINISTRATION EXPENSE $9,000

TAXES @15% OF INCOME BEFORE TAXES

Answer:

FLEXIBLE BUDGETED INCOME STATEMENT FOR ACTUAL PRODUCTION 47000 UNITS

SALES REVENUE (50*47,000) 2,350,000

COST OF SALE

DIRECT MATERIAL COST (12*47,000) 564,000

DIRECT LABOR COST (5*47,000) 235,000

V.MANUFACTURING OH (3*47,000) 141,000 (940,000)

OPERATING PROFIT 1,410,000

FIXED MANUFACTURING OH (25,000)

V.SALES AND ADMINISTRATION COST (3*47,000) (141,000)

FIXED SALES AND ADMINISTRATION EXPENSE (9,000)

PROFIT BEFORE INTEREST AND TAX 1,235,000

TAX @15% (1,235,000*30%) (185250)

PROFIT AFTER TAX 1,049,750

Explanation:

Flexed budget is based on very simple formula which is:

Total cost = Cost rate per unit * Numbers of actual units sold

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