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Prepare the pro forma income statement in contribution

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Reference no: EM132472662

Premier Manufacturing Inc., manufactures electronic devices and has established the following price and cost information:

                                                                  STANDARD                               ACTUAL

Sales Price                                       $ 50 per unit                    $ 48 per unit

Variable Manufacturing Cost:

Materials Cost                                   $ 10 per unit                    $ 9.50 per unit

Labor Cost                                        $ 12 per unit                    $ 12 per unit

Overhead Cost                                   $ 5 per unit                      $ 5.50 per unit

General, Selling and Admin Cost             $ 5 per unit                       $ 6 per unit

Fixed Manufacturing Cost:

Manufacturing Cost                              $ 100,000                         $ 95,000

General, Selling and Admin Cost              $ 40,000                           $ 48,000

  • Premier Manufacturing, Inc. expects to produce and sell 10,000 units. Actual production and sales amounted to 11,000 units.

Required:

The President of the Company has asked you to prepare the following information:

Question 1) Prepare the Pro Forma Income Statement in Contribution Format that would appear in Premier's Static budget for the year.

Question 2) Prepare the Pro Forma Income Statement in Contribution Format that would appear in Premier's flexible budget.

Reference no: EM132472662

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