90.2K

Verified Solution

Link Copied!

Alternate problem D: Use the following data for Andrea Company in preparing its planned operating budget: Plant capacity Expected sales volume Expected production Forecasted selling price 500,000 units 450,000 units 500,000 units 72.00 per unit $ Variable manufacturing costs per unit: Direct materials Direct labor Manufacturing overhead $ $ $ 27.00 9.00 6.00 Fixed manufacturing overhead per period $ 900,000 Selling and administrative expenses: Variable (per unit) $ 3.00 Fred (per period $ 750,000 Assume no beginning inventory. Federal income taxes are budgeted at 40% of income before income taxes. The actual results for Andrea Company for the year ended December 31, follow. (Note: The actual sales price was $80 per unit. Actual unit production was equal to actual unit sales.) Prepare a planned operating budget for the year ended December 31 b. Using a flexible operating budget, analyze the efficiency of operations by calculating the variance and indicating whether the variance is F (Favorable) or U (Unfavorable) Actual Budget @ 500,000 units (given) $ 40,000,000.00 |(500,000 actual x 80 actual selling price) Sales Cost of Goods Sold: Direct Materials ($27 per unit) Direct Labor ($9 per unit) Variable Mfg Overhead ($6 per unit) Fixed Overhead Total Cost of goods sold $ $ $ $ $ 12,000,000.00 4,400,000.00 4,000,000.00 1,000,000.00 21,400,000.00 Gross Profit $ 18,600,000.00 Selling and Administrative expenses: Variable ($ 3 per unit) Fixed Total Selling and Admin expenses $ $ $ 1,400,000.00 800,000.00 2,200,000.00 Income before taxes Income tax expense (40%) Net Income $ $ $ 16,400,000.00 6,560,000.00 9,840,000.00 Alternate Problem D: Flexible Budget Andrea Company Operating Budget For Year Ended December 31 given) Sales Cast of Goods Sold: Direct Materials Direct Labor Variable Mfg Overhead Fixed Overhead (GIVEN) Total Cost of goods sold Gross Profit Selling and Administrative expenses: Variable Fixed (GIVEN) Total Selling and Admin expenses Income before taxes Income tax expense (40%) Net Income leven b. Using a flexible operating budget, analyze the efficiency of operations by calculating the variance and indicating whether the variance is F (Favorable) or U (Unfavorable) Andrea Company Flexible Budget Performance Report For Year Ended December 31 Actual Budget Flexible Budget 500,000 units 500,000 actual units (GIVEN) Variance F(Favorable) or U (Unfavorable) Sales Cost of Goods Sold: Direct Materials ($27 per unit) Direct Labor ($9 per unit) Variable Mig Overhead (56 per unit) Foxed Overhead Total Cost of goods sold Gross Profit Selling and Administrative expenses: Variable (53 per unit) Fixed Total Selling and Admin expenses Income before taxes Income tax expense (40%) Net Income

Answer & Explanation Solved by verified expert

See Answer