FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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In your report to the CEO, you are to provide the following:
A flexible budget based on the actual volume that was sold last year for both
leather and vegan-polymer purses;
Transcribed Image Text:Exhibit 1
Static Budget
Vegan-
Polymer
5,000
$600,000 $2,850,000
Actual Results
Vegan-
Polymer
16,500
$1,875,000 $1,980,000 $3,855,000 $2,250,000
Leather
Total
Leather
Total
15,000
Sales volume
Sales revenue
12,500
29,000
20,000
$258,300
480,000
75.000
$813.300
$1,061,700
$856,800
912,608
174.000
$300,000
$135,000
135,000
30,000
Direct materials
$598,500
432,608
99.000
$1.130.108 S1,943.408
$450,000
735,000
120.000
$300.000 $1.290.000
$300,000 $1,560,000
$920.000
$640,000
Direct labour
600,000
90,000
Variable overhead
Total variable cost
$990.000
Contribution margin
Fixed overhead
Net income
$849,893 $1,911,593 $1,260,000
$920.000
$991,593
Standards from last year
Standard price/rate
(per metre/hour)
Leather
Standard
Vegan-
polymer
$40 per m $36 per m
$18 / hr
quantity/hour per unit
Vegan-
polymer
0.75 m
1.5 hrs
Leather
Direct materials
Direct labour
0.5 m
2 hrs
$20 / hr
Variable overhead allocated at a rate of $6 per unit
Actual results
Actual price/rate
(per metre/hour)
Vegan-
polymer
$42 per m
$15.30 / hr
Actual quantities
Vegan-
polymer
14,250 m
28,275 hrs
Leather
Leather
$41 per m
$20 / hr
6,300 m
24,000 hrs
Direct materials
Direct labour
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