Question

The master budget at Western Company last period called for sales of 240,000 units at $10.00 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 245,000 units. The selling price was $10.10 per unit. Variable costs were $3.75 per unit. Actual fixed costs were $270,000.

Required:

Prepare a flexible budget for Western.

Answer 1

Answer
Western Company
Flexible Budget
Sales (245000 units x $ 10.10)	$      2,474,500
Variable Cost (245000 units x $ 3)	$         735,000
Contribution margin	$      1,739,500
Fixed Cost	$         270,000
Net Operating Income	$      1,469,500

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