ACCT 2301 Chapter Notes - Chapter 8: Ideal Standard, Fixed Cost, Variable Cost
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Problem 16-46 Solve for Master Budget Given Actual Results (LO16-2, 4)
A new accounting intern at Gibson Corporation lost the only copyof this period's master budget. The CFO wants to evaluateperformance for this period but needs the master budget to do so.Actual results for the period follow:
Sales volume | 130,000 | units | |
Sales revenue | $ | 873,600 | |
Variable costs | |||
Manufacturing | 192,192 | ||
Marketing andadministrative | 78,624 | ||
Contribution margin | $ | 602,784 | |
Fixed costs | |||
Manufacturing | 251,200 | ||
Marketing andadministrative | 146,000 | ||
Operating profit | $ | 205,584 | |
The company planned to produce and sell 110,500 units for $6.00each. At that volume, the contribution margin would have been$464,100. Variable marketing and administrative costs are budgetedat 10 percent of sales revenue. Manufacturing fixed costs areestimated at $2.40 per unit at the normal volume of 110,500 units.Management notes, "We budget an operating profit of $1.00 per unitat the normal volume."
Required:
a. Construct the master budget for the period.(Do not round intermediate calculations.)
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b. Prepare a profit variance analysis.(Do not round intermediate calculations. Indicate theeffect of each variance by selecting "F" for favorable, or "U" forunfavorable. If there is no effect, do not select eitheroption.)
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