Preparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-...

Preparing a performance report

Use the flexible budget prepared in P7-6 for the 31,000-unit level and the actual operating results listed below for the 31,000-unit level.

Required:

1. Prepare a performance report.

2. List the major reasons why the actual operating income at 31,000 units differs from the master budget operating income at 30,000 units in Figure 7-12.

3. Given the level that the company operated at, how was its cost control?

Item

Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,800,000

Direct materials:

Lumber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633,000

Paint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,500

Direct labor:

Cutting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,200

Assembly. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,300

Painting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,100

Variable factory overhead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222,905

Variable selling and administrative expense . . . . . . . . . . . . . 777,400

Fixed factory overhead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210,500

Fixed selling and administrative expense . . . . . . . . . . . . . . . . 765,800

Reference: P7-6

Preparing a flexible budget

Use the information in Figure 7-12 of the chapter.

Required: Figure 7-12

Prepare flexible budgets for the production and sale of 29,000 units and 31,000 units, respectively.

Reference: