Nottingham Forest Products reports the following information concerning operations for the most recent mont Master Budget (based on budgeted sales of 4,000 units) $ 188,000 Sales revenue Less Manufacturing costs Direct labor Materials Variable overhead Marketing Administrative Total variable costs Contribution margin Fixed costs Manufacturing Actual (based on actual sales of 4,800 units) $ 228,700 50,302 31,520 16,608 7,805 7,215 $ 113,450 $ 115,250 38,930 39,000 27, 200 13,100 6,200 6,500 $ 92,000 $ 96,000 37,400
Nottingham Forest Products reports the following information concerning operations for the most recent mont Master Budget (based on budgeted sales of 4,000 units) $ 188,000 Sales revenue Less Manufacturing costs Direct labor Materials Variable overhead Marketing Administrative Total variable costs Contribution margin Fixed costs Manufacturing Actual (based on actual sales of 4,800 units) $ 228,700 50,302 31,520 16,608 7,805 7,215 $ 113,450 $ 115,250 38,930 39,000 27, 200 13,100 6,200 6,500 $ 92,000 $ 96,000 37,400
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 15E: Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Nottingham Forest Products reports the following information concerning operations for the most recent month:
Master Budget
(based on
Sales revenue
Less
Manufacturing costs
Direct labor
Materials
Variable overhead
Marketing
Administrative
Total variable costs
Contribution margin
Fixed costs
Manufacturing
Marketing
Administrative
Total fixed costs
Operating profits
There are no inventories.
Actual (based
on actual sales budgeted sales
of 4,800 units)
of 4,000
units)
$ 188,000
$ 228,700
50,302
31,520
16,608
7,805
7,215
$ 113,450
$ 115,250
38,930
14,860
9,510
$ 63,300
$ 51,950
Required:
Prepare a flexible budget for Nottingham Forest Products.
39,000
27, 200
13,100
6, 200
6,500
$ 92,000
$ 96,000
37,400
12, 200
10,400
$ 60,000
$ 36,000
Transcribed Image Text:NOTTINGHAM FOREST PRODUCTS
Flexible Budget
Sales revenue
Variable costs:
Manufacturing costs:
Direct labor
Materials
Variable overhead
Marketing
Administrative
Total variable costs
Contribution margin
Less fixed costs:
Manufacturing
Marketing
Administrative
Total fixed costs
Operating profit
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