Question

Required information Use the following information for the Quick Study below. The following information applies to the questions displayed below. Brodrick Company expects to produce 20,600 units for the year ending December 31. A flexible budget for 20,600 units of production reflects sales of $432,600: variable costs of $61,800; and fixed costs of $142,000. QS 23-3 Flexible budget LO P1 If the company instead expects to produce and sell 26,800 units for the year, calculate the expected level of income from operations, --Flexible Budget at - Flexible Budget Variable Amount per Total Fixed Unit Cost 20,600 units 26,800 units Sales Variable cost Contribution margin Fixed costs Income from operations

Answer 1

Solution 1:

Brodrick Company
Particulars	Flexible Budget		Flexible Budget for
	Variable amount per unit	Total fixed cost	20600 units	26800 units
Sales	$21.00		$432,600.00	$562,800.00
Variable costs	$3.00		$61,800.00	$80,400.00
Contribution margin	$18.00		$370,800.00	$482,400.00
fixed costs		$142,000.00	$142,000.00	$142,000.00
Income from operations			$228,800.00	$340,400.00

solution 2:

Brodrick Company
Flexible Budget Performance Report
For the year ended December 31
Particulars	Flexible budget	Actual results	Variances	Fav/Unfav.
Sales	$562,800.00	$514,800.00	$48,000.00	Unfavorable
Variable costs	$80,400.00	$113,900.00	$33,500.00	Unfavorable
Contribution margin	$482,400.00	$400,900.00	$81,500.00	Unfavorable
fixed costs	$142,000.00	$132,000.00	$10,000.00	Favorable
Income from operations	$340,400.00	$268,900.00	$71,500.00	Unfavorable