Question

McElroy Company has prepared the following master budget for 2016. Although McElroy has the capacity to...

McElroy Company has prepared the following master budget for 2016. Although McElroy has the capacity to manufacture 50,000 units, management expected the likely demand for its product to be 40,000 units in 2016; as such, it prepared the master budget to manufacture and sell 40,000 units. In early January 2017, the company was pleasantly surprised to find out that it manufactured and sold 45,000 units in 2016.

McElroy Company
Master (Static) Budget
For Year Ending December 31, 2016

Sales

$2,800,000

Cost of Goods Sold:

   Direct materials

$800,000

   Direct labor

300,000

   Indirect materials (variable)

24,000

   Indirect labor (variable)

36,000

   Depreciation

300,000

   Salaries

200,000

   Utilities (80% fixed)

100,000

   Maintenance (40% variable)

    50,000

1,810,000

Gross profit

$990,000

Operating expenses:

   Commissions (5% of sales)

$140,000

   Advertising (fixed)

    150,000

   Wages (variable)

    100,000

   Rent (fixed)

     50,000

   Total operating expenses

   440,000

Operating Income

$550,000

Prepare the flexible budget (FB) for the actual operating level achieved in 2016.

Homework Answers

Answer #1

for any clarification please comment.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A company has prepared a master budget for the month of February when they expected to...
A company has prepared a master budget for the month of February when they expected to sell 4,000 units. They actually sold 3,750 units. Calculate the flexible budget and the spending and volume variances for February. Identify if the variances are favorable or unfavorable. Actual Costs 3,750 Units Spending Variances Flexible Budget _______Units Volume Variances Master Budget 4,000 Units Manufacturing Costs: Direct Materials $14,500 $16,000 Direct Labor 38,500 40,000 Variable Manufacturing Overhead 12,000 14,000 Fixed Manufacturing Overhead 20,000 21,000 Total...
Blossom, Inc. prepared the following master budget items for July:       Production and sales 28,000 units...
Blossom, Inc. prepared the following master budget items for July:       Production and sales 28,000 units   Variable manufacturing costs:      Direct materials $ 28,000      Direct labor $ 61,000      Variable manufacturing overhead $ 42,000   Fixed manufacturing costs $ 130,000   Total manufacturing costs $ 261,600     During July, Blossom actually sold 34,000 units. Prepare a flexible budget for Blossom based on actual sales. (Do not round your intermediate calculations.) Production and Sales UNITS Variable manufacturing costs Direct materials Direct labor Variable manufacturing overhead...
Phoenix Company’s 2017 master budget included the following fixed budget report. It is based on an...
Phoenix Company’s 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 3,000,000 Cost of goods sold Direct materials $ 975,000 Direct labor 225,000 Machinery repairs (variable cost) 60,000 Depreciation—Plant equipment (straight-line) 300,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 200,000 1,955,000 Gross profit 1,045,000 Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed...
Okay Company is preparing to build its master budget. The budget will detail each quarter’s activity...
Okay Company is preparing to build its master budget. The budget will detail each quarter’s activity and the activity for the year in total. The master budget will be based on the following information: a. This will be the first year of operation for Okay Company. b. Budgeted unit sales by quarter for 2019 are projected as follows: First quarter 6,500, Second quarter 6,000, Third quarter 6,100 & Fourth quarter 6,250. First and second quarter 2020 budgeted sales units is...
Phoenix Company’s 2017 master budget included the following fixed budget report. It is based on an...
Phoenix Company’s 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 3,150,000 Cost of goods sold Direct materials $ 930,000 Direct labor 210,000 Machinery repairs (variable cost) 45,000 Depreciation—Plant equipment (straight-line) 300,000 Utilities ($30,000 is variable) 180,000 Plant management salaries 200,000 1,865,000 Gross profit 1,285,000 Selling expenses Packaging 90,000 Shipping 105,000 Sales salary (fixed...
Olive Company makes silver belt buckles. The company’s master budget appears in the first column of...
Olive Company makes silver belt buckles. The company’s master budget appears in the first column of the table. Required: Complete the table by preparing Olive’s flexible budget for 5,400, 7,400, and 8,400 units. (Round your intermediate calculations to 2 decimal places.) Master Budget (6,400 Units) Flexible Budget (5,400 Units) Flexible Budget (7,400 Units) Flexible Budget (8,400 Units) Direct materials $1,280 Direct labor 3,840 Variable manufacturing overhead 1,920 Fixed manufacturing overhead 18,400 Total manufacturing cost $25,440
Phoenix Company’s 2019 master budget included the following fixed budget report. It is based on an...
Phoenix Company’s 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales $ 3,000,000 Cost of goods sold Direct materials $ 915,000 Direct labor 240,000 Machinery repairs (variable cost) 45,000 Depreciation—Plant equipment (straight-line) 330,000 Utilities ($45,000 is variable) 180,000 Plant management salaries 200,000 1,910,000 Gross profit 1,090,000 Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed...
Phoenix Company’s 2017 master budget included the following fixed budget report. It is based on an...
Phoenix Company’s 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 3,150,000 Cost of goods sold Direct materials $ 960,000 Direct labor 240,000 Machinery repairs (variable cost) 45,000 Depreciation—Plant equipment (straight-line) 300,000 Utilities ($45,000 is variable) 210,000 Plant management salaries 200,000 1,955,000 Gross profit 1,195,000 Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed...
1 Master budget                                        
1 Master budget                                                                                                                                   60 points ABC Company requests you to prepare a budget for the third quarter ending September 30 2020. You are required to prepare the following budgets: Sales Sales receipt schedule Production Purchases Materials payment schedule Labor Overheads General admin and selling Capital Cash Sales Budget Budgeted sales of the company's product for the month of June was 28,000 units at $5/unit: It is anticipated that sales units will grow by 5% monthly from the previous month's...
The Master (Static) budget for Jack Daniels Inc. is presented below. For June, Jack Daniels Inc....
The Master (Static) budget for Jack Daniels Inc. is presented below. For June, Jack Daniels Inc. manufactured and sold 920 units for $835. During this month the company incurred $460,000 total variable expenses and $180,000 total fixed expenses. Required Prepare a flexible budget performance report for June including all variances.          Master (Static) Budget Units 1,000 Sales $800,000 Variable costs 450,000 Contribution margin $350,000 Fixed costs 150,000 Operating income $200,000 Jack Daniels Inc. used 3,450 pounds of aluminum in June to...