Build_a_Spreadsheet_11_37

Build_a_Spreadsheet_11_37 - Variable selling 4,800 x $12 =...

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DATA INPUT Lawnmate Company Operating Results For the Month of May Master Budget Actual Variance Units sold 5,000 4,800 200 U Revenue $1,200,000 $1,152,000 $48,000 U Variable cost 760,000 780,000 (20,000) U Contribution margin $440,000 $372,000 $68,000 U Fixed overhead 180,000 180,000 - Fixed general and adminstrative cost 120,000 115,000 5,000 F Operating income $140,000 $77,000 $63,000 U Unit costs: Direct material $60 Direct labor $44 variable overhead $36 variable selling costs $12 Total variable costs: $780,000 Direct material $320,000 Direct labor $192,000 Variable overhead $176,000 Variable selling expenes $92,000 SOLUTION 1) Flexible budget for the month of May, based on 4,800 units, showing separate variable cost budget is as follows: Lawnmate Company Flexibile Budget For the Month of May Revenue 4,800 x $1,200,000 / 5,000 = $1,152,000 Deduct: Variable costs: Direct material 4,800 x $60 = $288,000 Direct labor 4,800 x $44 = 211,200 Variable overhead 4,800 x $36 = 172,800
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Unformatted text preview: Variable selling 4,800 x $12 = 57,600 Total variable costs 729,600 Contribution margin $422,400 Deduct: Fixed costs: Fixed overhead 180,000 Fixed general and administrative 120,000 300,000 Operating income $122,400 2) Flexible-budget variances are as follows: Lawnmate Company Flexible-Budget Variances For the Month of May Flexible Flexible-Budget Actual Budget Variance Units 4,800 4,800 - Revenue $1,152,000 $1,152,000 $- Variable costs Direct material $320,000 $288,000 $32,000 U Direct labor 192,000 211,200 (19,200) F Variable overhead 176,000 172,800 3,200 U Variable selling 92,000 57,600 34,400 U Deduct: Total variable costs $780,000 $729,600 $50,400 U Contribution margin $372,000 $422,400 $(50,400) U Fixed costs: Fixed overhead $180,000 $180,000 $- Fixed general and administrative 115,000 120,000 (5,000) F Deduct: Total fixed costs $295,000 $300,000 $(5,000) F Operating income $77,000 $122,400 $(45,400) U...
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