Turtle Toys Unlimited manufactures children's toys. The company is evaluating the new toy product for toddlers. The company budgeted to sell 735 toys for $105 each. The variable costs include direct materials cost of $15 per unit and direct labour of $30 per unit. Fixed costs are estimated to be $8,000. Actual for the year are as follows: The Company sold 650 toys for $93 each. Actual variable costs were a total of $26,000 for the toys that were sold. Actual fixed costs were $10,000. Required Prepare a performance report that uses a flexible budget and a static budget. Determine the flexible budget variance, the sales volume variance, and the static budget variance. Ensure to report if each variance is favourable or unfavourable.

Turtle Toys Unlimited manufactures children's toys. The company is evaluating the new toy product for toddlers. The company budgeted to sell 735 toys for $105 each. The variable costs include direct materials cost of $15 per unit and direct labour of $30 per unit. Fixed costs are estimated to be $8,000. Actual for the year are as follows: The Company sold 650 toys for $93 each. Actual variable costs were a total of $26,000 for the toys that were sold. Actual fixed costs were $10,000. Required Prepare a performance report that uses a flexible budget and a static budget. Determine the flexible budget variance, the sales volume variance, and the static budget variance. Ensure to report if each variance is favourable or unfavourable.

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Description: Question 3 miterTurtle Toys Unlimited manufactures children's toys. The company is evaluating the new toyproduct for toddlers. The company budgeted to sell 735 toys for $105 each. The variable costsinclude direct materials cost of $15 per unit and d

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 26BEB: Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes...

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Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Unit variable cost is 21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is 30,000 and fixed selling and administrative expense is 48,000. Required: 1. Calculate the variable cost ratio. 2. Calculate the contribution margin ratio. 3. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin.
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Units to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the number of pairs of shoes Chillmax must sell to earn operating income of $81,900. 2. Check your answer by preparing a contribution margin income statement based on the number of units calculated. Enter amounts as positive numbers. Chillmax Company Contribution Margin Income Statement At Target Pairs of Shoes Sold Total Sales $ Total variable cost Total contribution margin Total fixed cost Operating income
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Units to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the number of pairs of shoes Chillmax must sell to earn operating income of $81,900. 2. Check your answer by preparing a contribution margin income statement based on the number of units calculated.