Reference no: EM132712176
Net operating income for the Bardol Company for 2018 was: Sales (45,000 units) $450,000Cost of goods sold:
Direct materials $ 90,000
Direct labor 67,500
Variable overhead 27,000
Fixed overhead 45,000
$229,500
Gross margin $220,500
Selling and administrative expenses:
Fixed $140,500
variable 27,000
167,500
Net operating income $ 53,000
- To prepare the budget for 2019, sales are forecasted at a 20% volume increase with no change in sales price or variable costs per unit. Fixed overhead was budgeted to be $45,000. Fixed selling and administrative expenses are budgeted to increase by $4,500. Sales and production volume are expected to be equal, and there are no beginning or ending inventories of work in process or finished goods.
The actual operating data for 2019 are:
Sales ($10 per unit) $520,000
Direct materials 105,750
Direct labor 78,750
Variable overhead 30,376
Fixed overhead 46,124
Variable selling and administrative expenses 31,050
Fixed selling and administrative expenses 145,428
Problem a. how do you prepare a report comparing the master 2019 operating budget with actual data for 2019. Do not calculate budget variances.
Problem b. how do you prepare a budget report comparing flexible operating budget amounts with actual data for 2019. Assume actual units produced equal the budgeted production from part a. Calculate and label budget variances.