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Required: a. Construct the master budget for the period. b. Prepare a profit variance analysis.

Required: a. Construct the master budget for the period. b. Prepare a profit variance analysis.

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
Section: Chapter Questions
Problem 7P: Preparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-unit level...
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The following are the actual results for Bentler Associates for the most recent period: 74,800 units Sales volume Sales revenue Variable costs Manufacturing Marketing and administrative Contribution margin Fixed costs Manufacturing Marketing and administrative Operating profit $ 972,400 Required: a. Construct the master budget for the period. b. Prepare a profit variance analysis. 242,080 39,200 $ 691,120 436,760 104,100 $ 150,260 The company planned to produce and sell 85,000 units for $12.50 each. At that volume, the contribution margin would have been $752,000. Variable marketing and administrative costs are budgeted at 5 percent of sales revenue. Manufacturing fixed costs are estimated at $5 per unit at the budgeted volume of 85,000 units. Management notes, "We budget an operating profit of $2.50 per unit at the budgeted volume."
Transcribed Image Text:The following are the actual results for Bentler Associates for the most recent period: 74,800 units Sales volume Sales revenue Variable costs Manufacturing Marketing and administrative Contribution margin Fixed costs Manufacturing Marketing and administrative Operating profit $ 972,400 Required: a. Construct the master budget for the period. b. Prepare a profit variance analysis. 242,080 39,200 $ 691,120 436,760 104,100 $ 150,260 The company planned to produce and sell 85,000 units for $12.50 each. At that volume, the contribution margin would have been $752,000. Variable marketing and administrative costs are budgeted at 5 percent of sales revenue. Manufacturing fixed costs are estimated at $5 per unit at the budgeted volume of 85,000 units. Management notes, "We budget an operating profit of $2.50 per unit at the budgeted volume."
Required A Required B Prepare a profit variance analysis. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If the option. Enter your final answers as a whole number.) Sales revenue Variable costs Manufacturing Marketing and administrative Contribution margin Fixed costs: Manufacturing Marketing and administrative Operating profit $ $ Actual 972,400 242,080 39,200 691,120 436,760 104,100 5 150,260 Manufacturing Variances BENTLER ASSOCIATES Profit Variance Analysis Marketing and Administrative Variances < Required A Sales Price Variance Flexible Budget Required > Sales Activity Variance Master Budget
Transcribed Image Text:Required A Required B Prepare a profit variance analysis. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If the option. Enter your final answers as a whole number.) Sales revenue Variable costs Manufacturing Marketing and administrative Contribution margin Fixed costs: Manufacturing Marketing and administrative Operating profit $ $ Actual 972,400 242,080 39,200 691,120 436,760 104,100 5 150,260 Manufacturing Variances BENTLER ASSOCIATES Profit Variance Analysis Marketing and Administrative Variances < Required A Sales Price Variance Flexible Budget Required > Sales Activity Variance Master Budget
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