Zachary Manufacturing Company established the following standard price and cost
ID: 2520161 • Letter: Z
Question
Zachary Manufacturing Company established the following standard price and cost data. Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost $ 8.50 per unit $ 3.40 per unit $2,400 total 600 total Zachary planned to produce and sell 2,900 units. Actual production and sales amounted to 3,100 units. Required a. Prepare the pro forma income statement in contribution format that would appear in a master budget. b. Prepare the pro forma income statement in contribution format that would appear in a flexible budget. Complete this question by entering your answers in the tabs below.Explanation / Answer
ZACHARY MANUFACTURING COMPANY
Pro Forma Income statement
Master Budget
2,900 Units
Sales ( 2,900* 8.50)
24,650
Less: Variable manufacturing cost (2,900*3.40)
(9,860)
Contribution margin
14,790
Less: Fixed manufacturing cost
( 2,400)
Less: fixed selling and administrative cost
(600)
Net Profit
11,790
ZACHARY MANUFACTURING COMPANY
Pro Forma Income statement
Flexible Budget
3,100 Units
Sales ( 3,100* 8.50)
26,350
Less: Variable manufacturing cost (3,100*3.40)
(10,540)
Contribution margin
15,815
Less: Fixed manufacturing cost
( 2,400)
Less: fixed selling and administrative cost
(600)
Net Profit
12,810
Master Budget
2,900 Units
Sales ( 2,900* 8.50)
24,650
Less: Variable manufacturing cost (2,900*3.40)
(9,860)
Contribution margin
14,790
Less: Fixed manufacturing cost
( 2,400)
Less: fixed selling and administrative cost
(600)
Net Profit
11,790
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