Question

The master budget at Western Company last period called for sales of 235,000 units at $9.30 each. The costs were estimated to be $4.00 variable per unit and $270,000 fixed. During the period, actual production and actual sales were 240,000 units. The selling price was $9.40 per unit. Variable costs were $4.75 per unit. Actual fixed costs were $270,000. Prepare a flexible budget for Western.

Answer 1

Please see the budget preparation below

Step-by-step explanation:

Calculation:

Sales revenue = $2,232,000 (240,000 x $9.30)

Variable cost = $960,000(240,000 x $4)

WESTERN COMPANY

FLEXIBLE BUDGET

Sales revenue $2,232,000

Variable cost ($960,000)

Contribution margin $1,272,000

Fixed cost. ($270,000)

Operating profit. $1,002,000