Master budgeted income statement using variable costing

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Reference no: EM1313332

Master Budgeted income statement using Variable Costing.

Downes Consolidated Industries International uses a standard cost system and records standards in the accounting records. The standard costs for one unit of one of its products are as follows.

Direct Materials, 3lbs.@$20 per lb.	$ 60.00
Direct labor, 2 hrs. @$15 per hr.	$ 30.00
Variable overhead, 4machine hrs. @$1 per hr	$ 4.00
Fixed overhead, 4 machine hrs.@$2.50 per hr	$ 10.00
Total	$104.00

Overhead is applied on the basis of machine hours. The planned level of activity(denominator level) is 320,000 machine hours. The total budgeted fixed overhead is $800,000.

Other budgeted items are:
Unit selling price, $170,00 per unit
Variable selling & administrative expenses, $5 per unit
Fixed selling & administrative expenses, $160,000.
Planned level of production and sales, 80,000.

Reference no: EM1313332

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