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Snells is a retail department store. The following cost-volume relationships were used in develop- ing a flexible budget for the company for the current year. Yearly Fixed Expenses Variable Expenses per Sales Dollar Cost of merchandise sold $0.600 Selling and promotion expense $ 210,000 0.082 Building occupancy expense 186,000 0.022 Buying expense 150,000 0.041 Delivery expense 111,000 0.008 Credit and collection expense 72,000 0.002 Administrative expense 531,000 0.003 Totals $1,260,000 $0.758 Management expected to attain a sales level of $12 million during the current year. At the end of the year, the actual results achieved by the company were as follows. $10,500,000 Net sales 6,180,000 Cost of goods sold 1,020,000 Selling and promotion expense 420,000 Building occupancy expense 594,000 Buying expense 183,000 Delivery expense 90,000 Credit and collection expense 564,000 Administrative expense a. Prepare a schedule comparing the actual results with flexible budget amounts developed for the actual sales volume of $10,500,000. Organize your schedule as a partial multiple-step income statement, ending with operating income. Include separate columns for (1) flexible budget amounts, (2) actual amounts, and (3) any amount over (under) budget. Use the cost- volume relationships given in the problem to compute the flexible budget amounts. Instructions

Snells is a retail department store. The following cost-volume relationships were used in develop- ing a flexible budget for the company for the current year. Yearly Fixed Expenses Variable Expenses per Sales Dollar Cost of merchandise sold $0.600 Selling and promotion expense $ 210,000 0.082 Building occupancy expense 186,000 0.022 Buying expense 150,000 0.041 Delivery expense 111,000 0.008 Credit and collection expense 72,000 0.002 Administrative expense 531,000 0.003 Totals $1,260,000 $0.758 Management expected to attain a sales level of $12 million during the current year. At the end of the year, the actual results achieved by the company were as follows. $10,500,000 Net sales 6,180,000 Cost of goods sold 1,020,000 Selling and promotion expense 420,000 Building occupancy expense 594,000 Buying expense 183,000 Delivery expense 90,000 Credit and collection expense 564,000 Administrative expense a. Prepare a schedule comparing the actual results with flexible budget amounts developed for the actual sales volume of $10,500,000. Organize your schedule as a partial multiple-step income statement, ending with operating income. Include separate columns for (1) flexible budget amounts, (2) actual amounts, and (3) any amount over (under) budget. Use the cost- volume relationships given in the problem to compute the flexible budget amounts. Instructions

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter13: Budgeting And Standard Costs
Section: Chapter Questions
Problem 13.2.6P: Budgeted income statement and supporting budgets The budget director of Jupiter Helmets Inc., with...
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23.7A

1029 b. Write a statement evaluating the company's performance in relation to the plan reflected in the flexible budget. ronorts in nlanning and controlling
Transcribed Image Text:1029 b. Write a statement evaluating the company's performance in relation to the plan reflected in the flexible budget. ronorts in nlanning and controlling
23-4, LO23-5, Snells is a retail department store. The following cost-volume relationships were used in develop- ing a flexible budget for the company for the current year. 23.7A nd Using a dget Yearly Fixed Expenses Variable Expenses per Sales Dollar Cost of merchandise sold $0.600 Selling and promotion expense $210,000 0.082 Building occupancy expense 186,000 0.022 Buying expense 150,000 0.041 Delivery expense 111,000 0.008 Credit and collection expense 72,000 0.002 Administrative expense . 531,000 0.003 Totals $1,260,000 $0.758 Management expected to attain a sales level of $12 million during the current year. At the end of the year, the actual results achieved by the company were as follows. $10,500,000 Net sales 6,180,000 Cost of goods sold .... 1,020,000 Selling and promotion expense 420,000 Building occupancy expense 594,000 Buying expense 183,000 Delivery expense 90,000 Credit and collection expense 564,000 Administrative expense. a. Prepare a schedule comparing the actual results with flexible budget amounts developed for the actual sales volume of $10,500,000. Organize your schedule as a partial multiple-step income statement, ending with operating income. Include separate columns for (1) flexible budget amounts, (2) actual amounts, and (3) any amount over (under) budget. Use the cost- volume relationships given in the problem to compute the flexible budget amounts. Instructions
Transcribed Image Text:23-4, LO23-5, Snells is a retail department store. The following cost-volume relationships were used in develop- ing a flexible budget for the company for the current year. 23.7A nd Using a dget Yearly Fixed Expenses Variable Expenses per Sales Dollar Cost of merchandise sold $0.600 Selling and promotion expense $210,000 0.082 Building occupancy expense 186,000 0.022 Buying expense 150,000 0.041 Delivery expense 111,000 0.008 Credit and collection expense 72,000 0.002 Administrative expense . 531,000 0.003 Totals $1,260,000 $0.758 Management expected to attain a sales level of $12 million during the current year. At the end of the year, the actual results achieved by the company were as follows. $10,500,000 Net sales 6,180,000 Cost of goods sold .... 1,020,000 Selling and promotion expense 420,000 Building occupancy expense 594,000 Buying expense 183,000 Delivery expense 90,000 Credit and collection expense 564,000 Administrative expense. a. Prepare a schedule comparing the actual results with flexible budget amounts developed for the actual sales volume of $10,500,000. Organize your schedule as a partial multiple-step income statement, ending with operating income. Include separate columns for (1) flexible budget amounts, (2) actual amounts, and (3) any amount over (under) budget. Use the cost- volume relationships given in the problem to compute the flexible budget amounts. Instructions
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