Computing Net Income Using A Flexible Budget
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The Pixson Company's budgeted income statement for 2007 follows:
Sales (8,000 units) $128,000
Direct materials 27,600
Direct labor 6,000 Variable overhead 16,800
Fixed Overhead 15,000
Fixed selling & administrative expenses 30,000
Net Income $32,600
A flexible budget for 12,000 units would show net income of:
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Solution Summary
This solution illustrates how to compute a company's net income at a given level of production and sales using its flexible budget.
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Sales Revenues Per Unit=$128,000/8,000=$16
Direct Materials Per Unit=$27,600/8,000 =$ 3.45
Direct Labor Per Unit =$6,000/8,000 =$ .75
Variable Overhead Per ...
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