Answer Happy

A new accounting intern at Gibson Corporation lost the only copy of this period's master budget. The CFO wants to evaluate performance for this period but needs the master budget to do so. Actual results for the period follow. 140,000 units $784,000 Sales volume Sales revenue Variable costs Manufacturing Marketing and administrative Contribution margin Fixed costs Manufacturing Marketing and administrative Operating profit 172,480 70,560 $540,960 210,000 113,000 $217,960 The company planned to produce and sell 112,000 units for $5.00 each. At that volume, the contribution margin would have been $392,000. Variable marketing and administrative costs are budgeted at 10 percent of sales revenue. Manufacturing fixed costs are estimated at $2.00 per unit at the normal volume of 112,000 units. Management notes, "We budget an operating profit of $1.00 per unit at the normal volume." Required: a. Construct the master budget for the period. b. Prepare a profit variance analysis.
Required A Required B Construct the master budget for the period. (Do not round intermediate calculations.) GIBSON CORPORATION Master Budget units Sales volume Sales revenue Variable costs: Manufacturing Marketing and administrative Contribution margin Fixed costs: Manufacturing Marketing and administrative Operating profit
Prepare a profit variance analysis. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favoral GIBSON CORPORATION Profit Variance Analysis Actual Manufacturing Variances Marketing and Administrative Variances Sales Price Variance Flexible Budget Sales revenue $ 784,000 Variable costs: 172,480 70,560 540,960 $ Manufacturing Marketing and administrative Contribution margin Fixed costs: Manufacturing Marketing and administrative Operating profit 210,000 113,000 217,960 $
Sales Activity Variance Master Budget