Jansen Corporation's data concerning the company's monthly revenues and costs appear below.
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Variable Cost Formula
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Fixed Cost Formula
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Revenue
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$15.00/unit
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|
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Costs of material
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$7.25/unit
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|
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Wages and salaries
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$20,000
|
|
Utilities
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$0.45/unit
|
$1,200
|
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Rent
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|
$10,000
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Miscellaneous
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$0.90/unit
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$2,000
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Required:
a) Prepare the company's planning budget assuming that 10,000 units were manufactured.
b) Assume that 9,900 units were actually manufactured. Prepare the flexible budget for this level of activity.
c) Prepare a flexible budget performance report for the company using the actual income statement information shown below.
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Revenue
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$149,200
|
|
Costs of materials
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73,200
|
|
Salaries
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19,500
|
|
Utilities
|
5,800
|
|
Rent
|
10,000
|
|
Miscellaneous
|
12,000
|