Question

Finch Manufacturing Company established the following standard price and cost data. Sales price $ 8.90 per unit Variable manufacturing cost $ 3.60 per unit Fixed manufacturing cost $ 2,500 total Fixed selling and administrative cost $ 1,000 total Finch planned to produce and sell 3,000 units. Actual production and sales amounted to 3,200 units. Required Prepare the pro forma income statement in contribution format that would appear in a master budget. Prepare the pro forma income statement in contribution format that would appear in a flexible budget.

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Sales price $ 8.90 per unit Variable manufacturing cost $ 3.60 per unit Fixed manufacturing cost $ 2,500 total Fixed selling and administrative cost $ 1,000 total Finch planned to produce and sell 3,000 units. Actual production and sales amounted to 3,200 units.

1) Contribution format income statement:

Sales= 8,900

Variable costs= 3,600

Contribution margin= 5,300

Fixed MOH= 2,500

Fixed selling and administrative= 1,000

Net operating income= 1,800

2) Flexible budget

Sales= 26,700

Variable costs= 10,800

Contribution margin= 15,900

Fixed costs= 3,500

Net operating income= 12,400