The following partial budget versus actual report was prepared for Otis the Great, a manufacturer of dog chew toys disguised as "real life" items such as Crocs and bags of Goldfish: flexible budget actual variance flexible budget $108,000 volume variance master budget sales revenue $102,000 ? $18,000 F variable expenses ? $3,000 F $60,000 ? $50,000 fixed expenses $21,000 ? $25,000 Assuming the master budget was prepared for an activity level of 50,000 units and all products have the sales price and unit variable cost, which of the following statements is incorrect? O A. The actual units sold were 60,000. O B. The volume variance for fixed expenses equalled $0. O C. The budgeted unit variable expense was $1.00. O D. The actual unit sales price was $0.10 lower than the budgeted sales price. O E. The flexible budget fixed expenses equalled $21,000.

The following partial budget versus actual report was prepared for Otis the Great, a manufacturer of dog chew toys disguised as "real life" items such as Crocs and bags of Goldfish: flexible budget actual variance flexible budget $108,000 volume variance master budget sales revenue $102,000 ? $18,000 F variable expenses ? $3,000 F $60,000 ? $50,000 fixed expenses $21,000 ? $25,000 Assuming the master budget was prepared for an activity level of 50,000 units and all products have the sales price and unit variable cost, which of the following statements is incorrect? O A. The actual units sold were 60,000. O B. The volume variance for fixed expenses equalled $0. O C. The budgeted unit variable expense was $1.00. O D. The actual unit sales price was $0.10 lower than the budgeted sales price. O E. The flexible budget fixed expenses equalled $21,000.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 1PA

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Before the year began, the following static budget was developed for the estimated sales of 50,000. Sales are higher than expected and management needs to revise its budget. Prepare a flexible budget for 100,000 and 110,000 units of sales.
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Budgeted income statement and supporting budgets The budget director of Birding Homes Feeders Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for January: Estimated sales for January: Estimated inventories at January 1: Desired inventories at January 31: Direct materials used in production: Anticipated cost of purchases and beginning and ending inventory of direct materials: Direct labor requirements: Estimated factory overhead costs for January: Estimated operating expenses for January: Estimated other revenue and expense for January: Estimated tax rate: 25% Instructions Prepare a sales budget for January. Prepare a production budget for January. Prepare a direct materials purchases budget for January. Prepare a direct labor cost budget for January. Prepare a factory overhead cost budget for January. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be 9,000, and work in process at the end of January is estimated to be 10,500. Prepare a selling and administrative expenses budget for January. Prepare a budgeted income statement for January.