Prepare a flexible budget based on the actual number

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Question - Widgets Express assembles widgets and uses flexible budgeting and a standard cost system. Overhead is allocated based on the number of direct materials parts. The performance report for Widgets Express includes the following information:

 

Master
Budget

Actual
Results

Sales



Budget: 10,000 widgets x $200

$2,000,000


Actual: 12,000 widgets x $220


$2,640,000

Variable manufacturing expenses:



Direct materials



Budget: 100,000 parts x $5.00

500,000


Actual: 120,000 parts x $4.50


540,000

Direct labor



Budget: 20,000 hrs x $12.00

240,000


Actual: 22,500 hrs x $12.50


281,250

Variable overhead



Budget: 100,000 parts x $2.00

200,000


Actual: 120,000 parts x $2.20


264,000

Fixed manufacturing expenses:



Fixed overhead

85,000

100,000

Total cost of goods sold

1,025,000

1,185,250

Gross profit

$975,000

$1,454,750

Prepare a flexible budget based on the actual number of widgets sold.

Reference no: EM131824305

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