Perez Manufacturing Company established the following standard price and cost da

Question

Perez Manufacturing Company established the following standard price and cost data.

Perez planned to produce and sell 2,700 units. Actual production and sales amounted to 2,800 units.

Required

a)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.

Sales price $ 8.60 per unit Variable manufacturing cost $ 3.60 per unit Fixed manufacturing cost $ 2,700 total Fixed selling and administrative cost $ 700 total PEREZ MANUFACTURING COMPANY Pro Forma Income Statement Master Budget 2,700 Units

Explanation / Answer

Master Budget 2700 Units Sales Value 23220 Vaiable Manufacturing cost 9720 Contribution 13500 Fixed Manufacturing cost 2700 Fixed Selling & Admin cost 700 Net Income 10100 Flexible Budget 2800 Units Sales Value 24080 Vaiable Manufacturing cost 10080 Contribution 14000 Fixed Manufacturing cost 2700 Fixed Selling & Admin cost 700 Net Income 10600

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