Reference no: EM133088210

Question - The master budget for the year just ended was on a computer that was just hacked. You feel responsible because you didn't install anti-hacking software on the computer and you didn't have a backup file. Rather than admit your mistake to your supervisor, you are trying to reconstruct the budget. You have learned the following information.

Sales volume 180,000 units

Sales revenue $963,000

Variable costs:

Manufacturing 324,000

Marketing and administrative 90,000

Fixed costs:

Manufacturing 239,000

Marketing and administrative 84,000

Operating profit $226,000

You know that the company planned to sell 162,000 units at a price of $5 each. Variable marketing and administrative costs are budgeted at 12 percent of revenue. You have discovered that the manufacturing fixed costs are budgeted to be $1.50 per unit at the budgeted volume. You know that the company policy is to budget for an operating profit of one dollar per unit. Finally, you recall that the master budget for fixed marketing and administrative costs is $81,000.

Required - Prepare a report explaining the differences between the actual results, flexible budget, and the master budget.