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 to 85,000 units of sales. What is net income at 85,000 units of sales? A) ($33,500) B) $22,750 C) $66,500 D) ($21,000) SalesCost of goods soldDirect materialDirect laborVariable manufacturing overheadFixed manufacturing overheadCost of goods soldGross profitVariable sales and administration expensesFixed sales and administration expensesIncome before taxesTaxesNet income$3,500,000900,0001,000,000250,00080,0002,230,0001,270,000100,000950,000220,00066,000$ 154,000

Lets understand the basics. Budgets are generally prepared in order to estimate future profit and…

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 to 85,000 units of sales. What is net income at 85,000 units of sales? A) ($33,500) B) $22,750 C) $66,500 D) ($21,000)

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 to 85,000 units of sales. What is net income at 85,000 units of sales? A) ($33,500) B) $22,750 C) $66,500 D) ($21,000)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Problem 2 Meals Company is a startup company producing and delivering boxed meals to tailgate parties. The company operates four months, September through December, during a fiscal year. Assume there are zero costs during the ensuing eight months. The company owner has forecasted the following sales and financial data for the upcoming fiscal year: Meal boxes sold 20,000 total boxes; the sales forecast for the meals sold by month follows: Forecast 5,000 5,000 8,000 2,000 September October November Meal box sales price Food cost Wages December $5.00 $2.00 per box Food preparer Owner $10 per hour; 0.05 hours per box $20,000 salary $1,000 + $0.10 per box $3.50 per gallon 20 miles per gallon 400 total miles driven delivering meals $4,000 $6,000 Utilities Fuel Facilities Miscellaneous Required (a) Prepare an annual budget for the fiscal year Annual Budget $ Revenue Expenses Total Expenses NOI 7
Pacific Company provides the following information about its budgeted and actual results for June 2019. Although the expected June volume was 25,000 units produced and sold, the company actually produced and sold 27,000 units, as detailed here.
Corporation has a normal capacity of 2,000,000 units. The current year's budget was based on the production and sales of 1,400,000 units. Actual statistics came out to be: production of 1,440,000 units and sales of 1,200,000 units. Selling price is at P20 per unit and the contribution margin ratio is 30%. What is the peso value that best quantifies the marketing division's failure to achieve budgeted performance for the current year?
A retail business budgets for a period with a total sales revenue (operating revenue) of $ 65,000,000. Total operating costs (fixed and variable costs) are expected to amount to 85% of sales revenue. Budgeted coverage rate is 30%.a) What is the budgeted operating profit?b) What is budgeted zero point sales?
Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $19 each and used a budgeted selling price of $19 per unit. Actual Budgeted Units sold 48,000 units 39,000 units Variable costs $167,000 $152,000 Fixed costs $41,000 $50,000 What is the static-budget variance of revenues? A) $171,000 favorable B) $171,000 unfavorable C) $6,000 favorable D) $9,000 unfavorable
Francis and Company has planned a cash budget for the third quarter of 2004. The cash balance on July 1, 2004 is expected to be an overdraft of $82,000. Extracts from the sales and purchases budgets are as follows: Budgeted Budgeted Purchases Month Sales $800,000 $900,000 May $600,000 $550,000 $450,000 $500,000 June July August September $750,000 $650,000 $800,000 All sales are on credit and an analysis of the records shows that debtors settle according to the following pattern, in accordance with the credit terms 5/30, n90: i) 50% in the month of sale 30% in the month following sale 20% the following month i1) All purchases are on credit and past experience shows that 80% are settled in the month of purchase in order to take advantage of a 10% prompt settlement discount. The balance will be disbursed in the month after purchase. The credit terms of the suppliers - 10/30, n60. Wages and salaries are expected to be $1,800,000 per annum and are paid iii) monthly. Fixed operating…
The following information pertains to the month of August. As part of the budgeting process, Shelley Company developed the following static budget for August. Shelley Company is in the process of preparing the flexible budget and understanding the results. Actual Flexible Static Results Budget Budget Sales volume (in units) 50,000 60,000 $1,000,000 $ Sales revenues Variable costs $1,200,000 900,000 780.000 2$ Contribution margin 220,000 300,000 158,000 $ 62,000 180.000 $ 120,000 Fixed costs Operating profit The flexible budget will report for fixed costs. O $900,000 O $600,000 O $180,000 O $150,000 O $160,000 %24
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 $3,580,000 $fill in the blank 1 $fill in the blank 2 Cost of Goods Sold Direct Material $900,000 $fill in the blank 3 $fill in the blank 4 Direct Labor 1,100,000 fill in the blank 5 fill in the blank 6 Variable Manufacturing Overhead 240,000 fill in the blank 7 fill in the blank 8 Fixed Manufacturing Overhead 70,000 fill in the blank 9 fill in the blank 10 Cost of Goods Sold $2,310,000 $fill in the blank 11 $fill in the blank 12 Gross Profit $1,270,000 $fill in the blank 13 $fill in the blank 14 Variable Sales and Administrative Expenses 100,000 fill in the blank 15 fill in the blank 16 Fixed Sales and Administrative Expenses 940,000 fill in the blank…
Gibson Corporation, which has three divisions, is preparing its sales budget. Each division expects a different growth rate because economic conditions vary in different regions of the country. The growth expectations per quarter are 4 percent for Cummings Division, 2 percent for Springfield Division, and 6 percent for Douglas Division. Required a. Complete the sales budget by filling in the missing amounts. b. Determine the amount of sales revenue that the company will report on its quarterly pro forma income statements. Complete this question by entering your answers in the tabs below. Required A Required B Complete the sales budget by filling in the missing amounts. Note: Round your final answers to the nearest whole dollar amount. Division First Quarter Second Quarter Third Quarter Fourth Quarter Cummings Division $ 160,000 Springfield Division 390,000 Douglas Division 260,000 Required A Required B >
The actual information pertains to the third quarter. As part of the budgeting process, the Duck Decoy Department of Paralith Incorporated had developed the following static budget for the third quarter. Duck Decoy is in the process of preparing the flexible budget and understanding the results. Actual Results Flexible Budget Static Budget Sales volume (in units) 19,000 18,000 Sales revenues $240,000 $ $233,000 Variable costs 141,000 183,000 Contribution margin 99,000 50,000 Fixed costs 41,000 34,000 Operating profit $58,000 $ $16,000 The flexible budget will report ________ for the fixed costs. Do not give answer in image formate
During the current year, Cullumber Corporation expects to produce 10,000 units and has budgeted the following: net income $350,000; variable costs $1,290,000; and fixed costs $110,000. It has invested assets of $1,650,000. What was the company's budgeted ROI? What was its budgeted markup percentage using a total cost approach? Budgeted ROI per unit Budgeted markup percentage $ %
3. 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. Sales $3,500,000 Cost of goods sold Direct material 900,000 Direct labor 1,000,000 Variable manufacturing overhead Fixed manufacturing overhead Cost of goods sold Gross profit Variable sales and administration expenses Fixed sales and administration expenses 250,000 80,000 2,230,000 1,270,000 100,000 950,000 Income before taxes 220,000 Таxes 66,000 Net income $ 154,000