Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and managementneeds to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales.Flexible Budget100,00080,00090,000Sales$3,570,000 $Cost of Goods SoldDirect Material$900,000 $$Direct Labor1,100,000Variable Manufacturing Overhead240,000Fixed Manufacturing Overhead70,000Cost of Goods Sold$2,310,000 $$4Gross Profit$1,260,000$4Variable Sales and Administrative Expenses100,000Fixed Sales and Administrative Expenses940,000Income Before Taxes$220,000Taxes66,000Net Income/Lss$154,000 $

sales per unit = sales / number of units sold = $3570000 / 100000 = $37.5 Flexible budget at 80000…

Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and management needs to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales. Flexible Budget 100,000 80,000 90,000 Sales $3,570,000 $ $4 Cost of Goods Sold Direct Material $900,000 $4 Direct Labor 1,100,000 Variable Manufacturing Overhead 240,000 Fixed Manufacturing Overhead 70,000 Cost of Goods Sold $2,310,000 $4 Gross Profit $1,260,000 $ Variable Sales and Administrative Expenses 100,000 Fixed Sales and Administrative Expenses 940,000 Income Before Taxes $220,000 $4 Taxes 66,000 Net Income/LoSs $154,000 $

Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and management needs to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales. Flexible Budget 100,000 80,000 90,000 Sales $3,570,000 $ $4 Cost of Goods Sold Direct Material $900,000 $4 Direct Labor 1,100,000 Variable Manufacturing Overhead 240,000 Fixed Manufacturing Overhead 70,000 Cost of Goods Sold $2,310,000 $4 Gross Profit $1,260,000 $ Variable Sales and Administrative Expenses 100,000 Fixed Sales and Administrative Expenses 940,000 Income Before Taxes $220,000 $4 Taxes 66,000 Net Income/LoSs $154,000 $

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 12PA: Before the year began, the following static budget was developed for the estimated sales of 100,000....

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