Purchase Solution

Preparing a Flexible Budget at the 90,000 Unit Level of Activity

Not what you're looking for?

Ask Custom Question

Preparing a Flexible Budget

The flexible budget at the 70,000-unit and the 80,000-unit levels of activity is shown below.

70,000 Units 80,000 Units 90,000 Units
Sales . . . . . . . . . . . . . . $1,400,000 $1,600,000
Cost of goods sold . . . . . . . . . 840,000 960,000
Gross profit on sales . . . . . . . .560,000 640,000
Operating expenses ($90,000 fixed) . 370,000 410,000
Operating income . . . . . . . . . . 190,000 230,000
Income taxes(30% of operating income) 57,000 69,000
Net income . . . . . . . . . . . . . 133,000 161,000

Complete the flexible budget at the 90,000-unit level of activity. Assume that the cost of goods sold and variable operating expenses vary directly with sales and that income taxes remain at 30 percent of operating income.

Purchase this Solution
Solution Preview

Preparing a Flexible Budget

The flexible budget at the 70,000-unit and the 80,000-unit levels of activity is shown below.

70,000 Units 80,000 Units 90,000 Units
Sales . . . . . . . . . . . . . . $1,400,000 $1,600,000
Cost of goods sold . . . . . . . . . 840,000 960,000
Gross profit on sales . . . . . . . .560,000 640,000
Operating expenses ($90,000 fixed) ...

Purchase this Solution
Free BrainMass Quizzes
Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

View More Free Quizzes
Related BrainMass Solutions

  • Flexible Budgets and Budget Estimates

    (see attached file for data) Complete the flexible budget at the 90,000-unit level of activity.

  • Flexible Budget

    explanation to complete the flexible budget at the 90,000-unit level of activity.

  • Flexible Budget of Activity Based Costing

    has developed a flexible budget for each activity based on the following activity.

  • Preparing a Flexible Budget Report

    419626 Preparing a Flexible Budget Report Hannon Company expects to produce 1,200,000 units of Product XX in 2010. Monthly production is expected to range from 80,000 to 120,000 units.

  • Financial Statement Analysis, Flexible Budget

    Include a 350-700-word memo addressing the problem Preparing a Flexible Budget The flexible budget at the 70,000-unit and the 80,000-unit levels of activity is shown below. 70,000 Units 80,000 Units 90,000 Units Sales . . . . . . . .

  • Multiple choice

    and budget on a static budget result from comparing actual costs to one level of activity to budget costs at a different level of activity A static budget does not change with the actual activity and so we are measuring actual costs at a level of activity

  • Fixed and variable costs, static vs flexible, CVP analysis

    Definition of flexible budget: A flexible budget is a budget that is a function of one or more levels of activity. Thus, the budget depends on one or more measures of activity volume rather than being fixed in amount.

  • Managerial Accounting

    108006 Preparing a Flexible Budget Preparing a Flexible Budget (LOI) An incomplete flexible budget for overhead is given below for AutoPutz, Gmbh, a German company that owns and operates a large automatic carwash facility near Koln.

  • Flexible budget lends itself to cost-volume-profit analysis

    Definition:--A flexible budget is a budget that is a function of one or more levels of activity. Thus, the budget depends on one or more measures of activity volume rather than being fixed in amount.

View More Related Solutions