The info needed is above FREAB219 Ch8 Hw HOM CON\' EDIT COM VIEV FORI PRO SHAI H
ID: 2511059 • Letter: T
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The info needed is above FREAB219 Ch8 Hw HOM CON' EDIT COM VIEV FORI PRO SHAI HELF COM Find tart AB219Ch8 Hw due.pdf * × Exercise 8-1B Preparing master and flexible budgets (LO 8-1) Imboden Manufacturing Company established the following standard price and cost data. Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative costS24000 total S 15 per unit 7per unit $32,500 total Imboden planned to produce and sell 18,000 units. It actually produced and sold 19,000 units. Required: a. Prepare the pro forma income statement that would appear in a master budget. Use the contribution margin format. Prepare the pro forma income statement that would appear in a flexible budget. Use the contribution margin format. b. b. Flexible Budget 19.000 Units a. Master Price/Cost Budget 18.000 Units 270,000 126,000 144,000 32.500 24,000 87.500 per Unit Sales Variable manufacturing Contribution margin Fixed manufacturing Fixed selling and admin. Net income 285000 133,000 152.000 32.500 24.000 95,000 15Explanation / Answer
Ans a & b a b Flexible Budget F Actual results Flexible budget variance M-F units 19000 19000 Sales 285000 280250 4750 U (19000*14.75) Variable manufacturing 133000 129200 3800 F (19000*6.8) Contribution Margin 152000 151050 950 U fixed manufactuing 32500 33500 1000 U fixed selling & adm 24000 23500 500 F net Income 95500 94050 1450 U ans c Can be called as activity variance as fixed cost is same in master budget and flexible budget ans d the variance tells us the difference between actual performance and theFlexible budeted performance for same units produced. Flexible Budget variance tells us how efficiently the operations have been performed. It also tells weather the cost is controlled or not. As per the above flexible budget report it shows that the variable manufacturing cost was controlled and it was less than the budgeted but the actual selling price per unit was less than the budgeted hence giving unfavorable variance.
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