QUESTION 1. vegan, llc, owns a chain of gourment vegetarian take-out markets. la
ID: 2435384 • Letter: Q
Question
QUESTION 1.vegan, llc, owns a chain of gourment vegetarian take-out markets. last month, store q generated the following information: sales, $890,000; direct marerials, $220,000; direct labor, $97,000; variable overhead, $150,000; fixed overhead, $130,000; variable selling and administrative expenses, $44,500; and fixed selling expenses, $82,300. There was no beginning or ending inventrories. Average daily sales (25 business days) were $35,600. customer orders processed totaled 15,000.
vegan had budgeted monthly sales of $900,000; direct materials, $210,000; direct labor, $100,000; variable overhead, $140,000; fixed overhead, $140,000; variable selling and administrative expenses, $45,000; and fixed selling expenses, $60,000. store q had been projected to do $36,000 in daily sales and process 16,000 customer orders. using this information, prepare a performance report for store q.
QUESTION 2.
roofing tile is the major product of the tops corp. the company had a particularly good year, as shown by its operating data. it sold 88,400 cases of tile. variable cost of goods sold was $848,640; variable selling expenses were $132,600; fixed overhead was $166,680; fixed selling expenses were $152,048; and fixed administrative expenses were $96,450. selling price was $18 per case. there were no partially completed jobs in process at the beginning or the end of the year. finished good inventory had been used up at the end of the previous year.
1. prepare the calendar year-end income statement for the tops corp. using the traditional reporting format.
2. prepare the calenda year-end income statement for the tops corp. using the variable costing format.
Explanation / Answer
Vegan, LLC.
Performance Report for Store Q
For the month ended XXXX
Budgeted Actual
Sales Revenue $900,000 $890,000
Less : Variable Costs
Direct Materials $210,000 $220,000
Direct labor $100,000 $97,000
Variable Overheads $140,000 $150,000
Variable Selling & Admin. $45,000 $495,000 $44,500 $511,500
Contribution Margin $405,000 $378,500
Less : Fixed Costs
Fixed Overheads $140,000 $130,000
Fixed Selling & Admin. $60,000 $200,000 $82,300 $212,300
Operating Income $205,000 $166,200
========= ========
Customer Order Processed 15,000 orders 16,000
____________________________________
Note : 1) Contribution margin has reduced from budgeted $27 per order ($405,000 / 15,000) to $23.65
per order ($378,500 / 16,000)
2) Operating Income has also reduced from budgeted $13.67 per order ($205,000 / 15,000 ) to
$10.39 per order($166,200 / 16,000)
3) Selling Price has declined from budgeted $60 per order ($900,000 / 15,000) to $55.625
($890,000 / 16,000)
4) Variable Costs has reduced from budgeted $33 ($495,000 / 15,000) to $31.97
($511,500 / 16,000)
5) There is increase in Fixed costs to process additional 1000 orders to the extent of $12,300
6) Average dialy sales has also decreased from budgeted $36,000 to $35,600, hence bringing total
reduction of $10,000 (25 x 400) in monthly sales i.e. ($900,000 - $890,000)
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