Question

Campbell Manufacturing Company established the following standard price and cost data. Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost $ 8.50 per unit $ 3.90 per unit $2,900 total $1,000 total Campbell planned to produce and sell 2,000 units. Actual production and sales amounted to 2,200 units. Required a. Prepare the pro forma income statement in contribution format that would appear in a master budget. b. Prepare the pro forma income statement in contribution format that would appear in a flexible budget.

Answer 1

Answer-a)-

CAMPBELL MANUFACTURING COMPANY
CONTRIBUTION FORMAT INCOME STATEMENT
MASTER BUDGET (2000 UNITS)
PARTICULARS		AMOUNT
		$
Sales	2000 units*$8.50 per unit	17000
Less- Variable manufacturing costs	2000 units*$3.90 per unit	7800
Contribution margin		9200
Less- Fixed costs
Manufacturing cost		2900
Selling & administrative cost		1000
Net Income		5300

b)-

CAMPBELL MANUFACTURING COMPANY
CONTRIBUTION FORMAT INCOME STATEMENT
FLEXIBLE BUDGET (2200 UNITS)
PARTICULARS		AMOUNT
		$
Sales	2200 units*$8.50 per unit	18700
Less- Variable manufacturing costs	2200 units*$3.90 per unit	8580
Contribution margin		10120
Less- Fixed costs
Manufacturing cost		2900
Selling & administrative cost		1000
Net Income		6220