Todhunter Publication established the following standard price and costs for a h

Question

Todhunter Publication established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs: sales price $36.00,materials $9.00,labor $4.50, overhead $6.30, GSA $7.20. Planned fixed costs: Manufacturing $135,000, GSA $54,000. Todhunter planned to sell 30,000 copies of the book. Required: a.)prepare the pro forma income statement that would appear in the master budget. b.)prepare flexible income statements assuming volumes of 29,000 and 31,000 units. c.)determine the sales and variable cost volume variances, assuming volume is actually 31,000 units d.)indicate wheather the variances are favorable or unfavorable. e.)how could Todhunter use the variances to evaluate performance

Explanation / Answer

Todhunter Publication established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs: sales price $36.00,materials $9.00,labor $4.50, overhead $6.30, GSA $7.20. Planned fixed costs: Manufacturing $135,000, GSA $54,000. Todhunter planned to sell 30,000 copies of the book and A

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