Question

Return to Blackboard Davis, Managerial Accounting, 3e Help System Announcements CALCULATOR PRINTER VERSION BACK NEXT Vaughn manufactures aluminum canoes. In planning for the coming year, CFO Alexis King is considering three different sales targets: 2,500 canoes, 3,000 canoes, and 3,500 canoes. Canoes sell for $809 each. The standard variable cost information for a canoe is as follows. RCES ORK $325 195 Direct materials Direct labor Variable overhead Utilities Indirect material Indirect labor Total 35 60 $645 tudy. Annual fixed overhead cost is expected to be: Maintenance $ 18,490 Depreciation 36,500 Insurance 25,920 Rent 28,550 Total $ 109,460 Alexis King chose to prepare a static budget based on sales of 3,000 canoes. Actual sales were 3,100 canoes at a price of $859 each. The company incurred the following costs for the year: Direct material $ 994,300 Direct labor 575,800 Variable overhead 398,200 Fixed overhead 116,660 Total $2.084,960 11:14 PM

Answer 1

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		Actual Result	Flexible Budget Variance		Flexible Budget	Sales Volume Variance		Static Budget
Units		3,100			3,100			3,000
Sales Value		$           2,662,900	$                    155,000	F	$                 2,507,900	$                       80,900	F	$           2,427,000	$809 Per unit
Less: Variable Cost
Direct Material		$               994,300	$                       13,200	F	$                 1,007,500	$                       32,500	U	$               975,000	$325 per unit
Direct Labor		$               575,800	$                       28,700	F	$                    604,500	$                       19,500	U	$               585,000	$195 per unit
Variable Overheads		$               398,200	$                       10,700	U	$                    387,500	$                       12,500	U	$               375,000	$125 per unit
Contribution margin		$               694,600	$                    186,200	F	$                    508,400	$                       16,400	F	$               492,000
			$                                -			$                                -
Fixed Overheads		$               116,660	$                         7,200	U	$                    109,460	$                                -	None	$               109,460
			$                                -			$                                -
Net Income		$               577,940	$                    179,000	F	$                    398,940	$                       16,400	F	$               382,540