Jansen Corporation’s data concerning the company’s monthly revenues and costs appear below.
|
Variable Cost Formula |
Fixed Cost Formula |
|
|
Revenue |
$15.00/unit |
|
|
Costs of material |
$7.25/unit |
|
|
Wages and salaries |
$20,000 |
|
|
Utilities |
$0.45/unit |
$1,200 |
|
Rent |
$10,000 |
|
|
Miscellaneous |
$0.90/unit |
$2,000 |
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.
|
Revenue |
$149,200 |
|
Costs of materials |
73,200 |
|
Salaries |
19,500 |
|
Utilities |
5,800 |
|
Rent |
10,000 |
|
Miscellaneous |
12,000 |