San Diego State University Operations And Supply Chain Management Assignment Help - Income

Question - Pebco Company's 2011 master budget included the following fixed budget report. It is based on an
expected production and sales volume of 16,000 units.

PEBCO COMPANY
Fixed Budget Report
For Year Ended December 31, 2011
Sales $ 4,000,000
Cost of goods sold
Direct materials $ 1,005,000
Direct labor 225,000
Machinery repairs (variable
cost) 75,000
Depreciation"plant
equipment 300,000
Utilities ($55,000 is
variable) 215,000
Plant management salaries 215,000 2,035,000

Gross profit 1,965,000
Selling expenses
Packaging 75,000
Shipping 110,000
Sales salary (fixed annual
amount) 260,000 445,000

General and administrative
expenses
Advertising expense 130,00 ...Read More 0
Salaries 251,000
Entertainment expense 100,000 481,000

Income from operations $ 1,039,000

Pebco Company's actual income statement for 2011 follows.

PEBCO COMPANY
Statement of Income from Operations
For Year Ended December 31, 2011
Sales (19,000 units) $ 4,798,000
Cost of goods sold
Direct materials $ 1,208,438
Direct labor 276,188
Machinery repairs (variable
cost) 80,063
Depreciation"plant
equipment 300,000
Utilities (fixed cost is
$157,000) 221,563
Plant management salaries 225,000 2,311,252

Gross profit 2,486,748
Selling expenses
Packaging 86,813
Shipping 122,625
Sales salary (annual) 277,000 486,438

General and administrative
expenses
Advertising expense 138,000
Salaries 251,000
Entertainment expense 103,500 492,500

Income from operations $ 1,507,810







Required:
1. Prepare a flexible budget performance report for 2011. ...Read Less

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