Douglas Company provided the following budgeted information for the current year.
$\begin{array}{lr}
\text { Sales price } & \$ 50 \text { per unit } \
\text { Variable manufacturing cost } & \$ 32 \text { per unit } \
\text { Fixed manufacturing cost } & \$ 100,000 \text { total } \
\text { Fixed selling and administrative cost } & \$ 40,000 \text { total }
\end{array}$
Douglas predicted that sales would be 20,000 units, but the sales actually were 22,000 units. The actual sales price was $48.50 per unit, and the actual variable manufacturing cost was $33 per unit. Actual fixed manufacturing cost and fixed selling and administrative cost were $104,000 and $39,000, respectively.
Required:Using the form below, prepare a flexible budget; show actual results; calculate the flexible budget variances; and indicate whether the variances are favorable (F) or unfavorable (U).

Question

Douglas Company provided the following budgeted information for the current year.
 $\begin{array}{lr}
\text { Sales price } & \$ 50 \text { per unit } \
\text { Variable manufacturing cost } & \$ 32 \text { per unit } \
\text { Fixed manufacturing cost } & \$ 100,000 \text { total } \
\text { Fixed selling and administrative cost } & \$ 40,000 \text { total }
\end{array}$  
Douglas predicted that sales would be 20,000 units, but the sales actually were 22,000 units. The actual sales price was $48.50 per unit, and the actual variable manufacturing cost was $33 per unit. Actual fixed manufacturing cost and fixed selling and administrative cost were $104,000 and $39,000, respectively.
Required:Using the form below, prepare a flexible budget; show actual results; calculate the flexible budget variances; and indicate whether the variances are favorable (F) or unfavorable (U).

Quizplus · Accepted Answer

The Answer of Douglas Company provided the following budgeted information for the current year.
 $\begin{array}{lr}
\text { Sales price } & \$ 50 \text { per unit } \
\text { Variable manufacturing cost } & \$ 32 \text { per unit } \
\text { Fixed manufacturing cost } & \$ 100,000 \text { total } \
\text { Fixed selling and administrative cost } & \$ 40,000 \text { total }
\end{array}$  
Douglas predicted that sales would be 20,000 units, but the sales actually were 22,000 units. The actual sales price was $48.50 per unit, and the actual variable manufacturing cost was $33 per unit. Actual fixed manufacturing cost and fixed selling and administrative cost were $104,000 and $39,000, respectively.
Required:Using the form below, prepare a flexible budget; show actual results; calculate the flexible budget variances; and indicate whether the variances are favorable (F) or unfavorable (U).

Douglas Company Provided the Following Budgeted Information for the Current