80.2K

Verified Solution

Link Copied!

Pebco Company's 2011 master budget included the following fixed budget report. It is based on ar expected production and sales volume of 18,000 units PEBCO COMPANY Fixed Budget Report For Year Ended December 31, 2011 Sales Cost of goods sold $4,500,000 Direct materials Direct labor Machinery repairs (variable cost) Depreciation-plant equipment Utilities ($55,000 is variable) Plant management salaries $1,005,000 240,000 60,000 315,000 215,000 215,000 2,050,000 2,450,000 Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) 75,000 110,000 270,000 455,000 General and administrative expenses Advertising expense Salaries 135,000 261,000 100,000 Entertainment expense 496,000 Income from operations $1,499,000 Pebco Company's actual income statement for 2011 follows PEBCO COMPANY Statement of Income from Operations For Year Ended December 31, 2011 Sales (21,000 units) Cost of goods sold $5,328,000 Direct materials Direct labor Machinery repairs (variable cost) Depreciation-plant equipment Utilities (fixed cost is $157,500) Plant management salaries $1,189,500 288,000 61,000 315,000 221,167 225,000 2,299,667 Gross profit Selling expenses 3,028,33:3 Packaging Shipping Sales salary (annual) 85,000 120,333 288,000 493,333 General and administrative expenses Advertising expense Salaries Entertainment expense 144,000 261,000 103,500 508,500 Income from operations $2,026,500 Required: Required 1. Prepare a flexible budget performance report for 2011. (Do not round your intermediate calculations and round your final answers to nearest dollar amount. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance) Input all amounts as positive values. Leave no cells blank - be certain to enter "o" wherever required. Omit the "$" sign in your response.) PEBCO COMPANY Flexible Budget Performance Report For Year Ended December 31, 2011 Flexible Budget Actual Results Variances Sales Variable costs Direct materials Direct labor Machinery repairs Utilities Packaging Shipping Total variable costs Contribution margin Fixed costs Depreciation-plant equipment V Utilities Plant management salaries Sales salar Advertising expense Salaries Entertainment expense None None Total fixed costs Income from operations

Answer & Explanation Solved by verified expert

See Answer