Firenze Company's fixed budget for the first quarter of the calendar year appears below. Prepare flexible budgets that show variable costs per unit, fixed costs and two different flexible budgets for sales volumes of 22,000 and 24,000.Sales (20,000 units)………………………………?$800,000Cost of goods sold:?? Direct materials………………………………$160,000? Direct labor……………………………………150,000? Variable overhead……………………………100,000? Fixed overhead………………………………… 120,000 530,000 Gross profit……………………………………?$ 270,000Selling expenses: ?? Sales commissions (all variable)……………… 40,000? Advertising (all
fixed)…………………………50,000?General and administrative expenses: ?? Salaries (all fixed)……………………………80,000? Rent (all fixed)…………………………………30,000? Depreciation (all fixed)……………………… 20,000 220,000Net income from operations……………………?$ 50,000
What will be an ideal response?
| ? | _Flexible Budget_ | Flexible | Flexible | |
| ? | ? | ? | Budget | Budget |
| ? | Variable | Total | for Unit | for Unit |
| ? | Amount | Fixed | Sales of | Sales of |
| ? | per unit | Cost | 22,000 | 24,000 |
| Sales ($800,000/20,000)………… | $40.00 | ? | $880,000 | $960,000 |
| Variable costs: | ? | ? | ? | ? |
| Direct materials ($160,000/20,000) | $ 8.00 | ? | 176,000 | 192,000 |
| Direct labor ($200,000/20,000)… | 10.00 | ? | 220,000 | 240,000 |
| Variable overhead ($100,000/20,000) | 5.00 | ? | 110,000 | 120,000 |
| Sales commissions ($40,000/20,000) | 2.00 | ? | 44,000 | 48,000 |
| Total variable costs……………… | $25.00 | ? | 550,000 | 600,000 |
| Contribution margin……………… | $15.00 | ? | 330,000 | 360,000 |
| ? | ? | ? | ? | ? |
| Fixed costs: | ? | ? | ? | ? |
| Fixed overhead………………… | ? | $120,000 | 120,000 | 120,000 |
| Advertising expense-selling…… | ? | 50,000 | 50,000 | 50,000 |
| Salaries expenses-general and admin. | ? | 80,000 | 80,000 | 80,000 |
| Rent expenses-general and admin. | ? | 30,000 | 30,000 | 30,000 |
| Depreciation expense-general and admin. | ? | 20,000 | 20,000 | 20,000 |
| Total fixed costs………………… | ? | $300,000 | 300,000 | 300,000 |
| Income from operations…………… | ? | ? | $ 30,000 | $ 60,000 |
You might also like to view...
A company has an investment in 11% bonds with a par value of $138,000 that pay interest on October 1 and April 1. The amount of interest accrued on December 31 (the company's year-end) would be:
A. $3795. B. $1265. C. $15,180. D. $2530. E. $7590.
10 Which of the following attributes should always be included in an input element?
(a) SIZE (b) VALUE (c) MAXLENGTH (d) NAME
Describe the goals of financial management in preparation for a business exit.
What will be an ideal response?
In some instances, firms pair multiple channels with a multibrand strategy. The purpose of this strategy would be to ________ of the firm's family brand and differentiate its marketing channels.
A. create a backup channel B. minimize cannibalization C. generate awareness D. maximize channel profits E. create greater perceived value