Question

The master budget at Western Company last period called for sales of 230,000 units at $11.00 each. The costs were estimated to be $3.00 variable per unit and $270,000 fixed. During the period, actual production and actual sales were 235,000 units. The selling price was $11.10 per unit. Variable costs were $3.75 per unit. Actual fixed costs were $270,000.

Required: Prepare a flexible budget for Western.

Answer 1

i

Flexible Budget Particulars Amt $ (1) Sales Revenue evenue $25,85,000 [2,35,000 * $ 117 (2 | Variable Costs [2,35,000 $3] 1 Contribution Margin $7,05,000 $18,80,000 Fixed Costs $ 2,79000 Operating profit $ 16,10000