Golden Food Products produces special-formula pet food. The company carries no inventories. The master budget calls for the company to manufacture and sell 134,000 cases at a budgeted price of $74 per case this year. The standard direct cost sheet for one case of pet food follows: Direct materials Direct labor (4 pounds @ $2) (0.25 hours @ $32) $8 8 Variable overhead is applied based on direct labor-hours. The variable overhead rate is $44 per direct labor-hour. The fixed overhead rate (at the master budget level of activity) is $19 per unit. All nonmanufacturing costs are fixed and are budgeted at $2.9 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $376,000 favorable. Required:
Golden Food Products produces special-formula pet food. The company carries no inventories. The master budget calls for the company to manufacture and sell 134,000 cases at a budgeted price of $74 per case this year. The standard direct cost sheet for one case of pet food follows: Direct materials Direct labor (4 pounds @ $2) (0.25 hours @ $32) $8 8 Variable overhead is applied based on direct labor-hours. The variable overhead rate is $44 per direct labor-hour. The fixed overhead rate (at the master budget level of activity) is $19 per unit. All nonmanufacturing costs are fixed and are budgeted at $2.9 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $376,000 favorable. Required:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Golden Food Products produces special-formula pet food. The company carries no inventories. The master budget calls for the
company to manufacture and sell 134,000 cases at a budgeted price of $74 per case this year. The standard direct cost sheet for one
case of pet food follows:
Direct materials
Direct labor
(4 pounds @ $2)
(0.25 hours @ $32)
$ 8
8
Variable overhead is applied based on direct labor-hours. The variable overhead rate is $44 per direct labor-hour. The fixed overhead
rate (at the master budget level of activity) is $19 per unit. All nonmanufacturing costs are fixed and are budgeted at $2.9 million for the
coming year.
At the end of the year, the costs analyst reported that the sales activity variance for the year was $376,000 favorable.
Required:
Note: Enter your answers in thousands of dollars.
Transcribed Image Text:your
Sales revenue
Variable costs:
GOLDEN FOOD PRODUCTS
Flexible Budget
(thousands of dollars)
Variable overhead
Direct materials
Direct labor
Total variable costs
Contribution margin
Fixed costs:
Fixed overhead
Marketing
swers in
Total fixed costs
Operating profits
X Answer is not complete.
$
ITs.
$
$
10,292 X
1,072
$ 1,072
$ 9,220
0
9,220
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