Question

continuing hw problem, stuck on how and where to get it completed

Print Done Print i Requirements 1. Prepare a flexible budget for September for 900, 1,000 and 1.100 PCC model tablets. The tablet has a standard sales price of $675. List variable costs separately Using 1,000 PCC model tablets for the static budget, prepare a flexible budget performance report for September. Total sales revenue for the month was $767,800. The company sold 1,100 tablets. 3. What insights can the management of Piedmont Computer Company draw from the performance report? Print Done Clear All

Answer 1

1.

Units	Budgeted amounts per unit	900	1000	1100
Sales revenue	675	607500	675000	742500
Variable costs
Direct Materials	300	270000	300000	330000
Direct Labor	78	70200	78000	85800
Variable overhead	15	13500	15000	16500
Total variable costs		353700	393000	432300
Contribution margin		253800	282000	310200
Fixed expenses		54000	54000	54000
Operating income		199800	228000	256200

Direct labor per unit = 26* 3 = 78 per unit

Variable overhead = 15 * 3 = 15

2.

Units	Budgeted amounts per unit	Actual results	Flexible budget variance		Flexible budget	Sales volume variance		Static Budget
		1100			1100			1000
Sales revenue	675	767800	25300	F	742500	67500	F	675000
Variable costs
Direct Materials	300	341000	11000	U	330000	30000	U	300000
Direct Labor	78	88000	2200	U	85800	7800	U	78000
Variable overhead	15	17600	1100	U	16500	1500	U	15000
Total variable costs		446600	14300	U	432300	39300	U	393000
Contribution margin		321200	11000	F	310200	28200	F	282000
Fixed expenses		56320	2320	U	54000	0		54000
Operating income		264880	8680	F	256200	28200	F	228000

3. The increase in sales volume from the expected sales of 1000 tablets to 1100 units has resulted in an additional income of 28200. Also, the company sold for an average of $23 ($698 - 675) more than expected. The management must investigate why all flexible budgets are unfavorable. The actual variable cost has exceeded the standard variable cost and the actual fixed costs have exceeded the standard budget.