Sheridan Entertainment Corporation prepared a master budget for the month of November that was based on sales of 187,400 board games. The budgeted income statement for the period is as follows. Sales Revenue $2,811,000 Variable expenses Direct materials $824,560 Direct labor 412,280 Variable overhead 599,680 Total variable expenses 1,836,520 Contribution margin 974,480 Fixed overhead 214,000 Fixed selling and administrative expenses 424,000 Total fixed expenses 638,000 Operating income $336,480 During November, Sheridan produced and sold 159,600 board games. Actual results for the month are as follows. Sales Revenue $2,310,000 Variable expenses Direct materials $692,140 Direct labor 337,020 Variable overhead 499,620 Total variable expenses 1,528,780 Contribution margin 781,220 Fixed overhead 201,000 Fixed selling and administrative expenses 439,000 Total fixed expenses 640,000 Operating income $141,220

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 10E

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Chapter 6 Question 9

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Sheridan Entertainment Corporation prepared a master budget for the month of November that was based on sales of 187,400 board games. The budgeted income statement for the period is as follows.

Sales Revenue		$2,811,000
Variable expenses
Direct materials	$824,560
Direct labor	412,280
Variable overhead	599,680
Total variable expenses		1,836,520
Contribution margin		974,480
Fixed overhead	214,000
Fixed selling and administrative expenses	424,000
Total fixed expenses		638,000
Operating income		$336,480

During November, Sheridan produced and sold 159,600 board games. Actual results for the month are as follows.

Sales Revenue		$2,310,000
Variable expenses
Direct materials	$692,140
Direct labor	337,020
Variable overhead	499,620
Total variable expenses		1,528,780
Contribution margin		781,220
Fixed overhead	201,000
Fixed selling and administrative expenses	439,000
Total fixed expenses		640,000
Operating income		$141,220

Based on the available information, prepare a performance report for management. (If variance is zero, select "Not Applicable" and
enter O for the amounts.)
Actual Results
Flexible Budget Variance
Unit Sales
Sales revenue
24
$
Less
Variable expenses
Direct material
Direct labor
Variable overhead
Total variable expenses
Contribution margin
Less
Fixed expenses
Overhead
Selling and administrative
Total fixed expenses
Operating income
$
%24
%24
>
>
>
>
>
>

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