In: Accounting
The following information is
from Franklin Industries master budget for 2008:
Number of units |
15,000 |
Sales revenue |
$585,000 |
Direct materials |
165,000 |
Direct labor |
90,000 |
Variable factory overhead |
120,000 |
Fixed factory overhead |
75,000 |
Variable selling and administrative expenses |
60,000 |
Fixed selling and administrative expenses |
20,000 |
Prepare flexible budgets for the production and sale of 14,000,
15,000 and 16,000 units, respectively.
Franklin Industries | |||
Flexible budget | |||
Units | 14,000 | 15,000 | 16,000 |
Sales revenue | $ 5,46,000.00 | $ 5,85,000.00 | $ 6,24,000.00 |
Variable costs | |||
Direct material | $ 1,54,000.00 | $ 1,65,000.00 | $ 1,76,000.00 |
Direct labor | $ 84,000.00 | $ 90,000.00 | $ 96,000.00 |
Variable factory overhead | $ 1,12,000.00 | $ 1,20,000.00 | $ 1,28,000.00 |
Variable selling and administrative expenses | $ 56,000.00 | $ 60,000.00 | $ 64,000.00 |
Total Variable costs | $ 4,06,000.00 | $ 4,35,000.00 | $ 4,64,000.00 |
Contribution margin | $ 1,40,000.00 | $ 1,50,000.00 | $ 1,60,000.00 |
Fixed costs | |||
Fixed factory overhead | $ 75,000.00 | $ 75,000.00 | $ 75,000.00 |
Fixed selling and administrative expenses | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 |
Total Fixed expenses | $ 95,000.00 | $ 95,000.00 | $ 95,000.00 |
Operating income | $ 45,000.00 | $ 55,000.00 | $ 65,000.00 |
Working
Master budget | ||
Total | Per unit | |
Units | 15,000 | |
Sales revenue | $ 5,85,000.00 | $ 39.00 |
Direct material | $ 1,65,000.00 | $ 11.00 |
Direct labor | $ 90,000.00 | $ 6.00 |
Variable factory overhead | $ 1,20,000.00 | $ 8.00 |
Variable selling and administrative expenses | $ 60,000.00 | $ 4.00 |