Fournier Fixtures produces a variety of manufactured items for the home and building industry. The...
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Accounting
Fournier Fixtures produces a variety of manufactured items for the home and building industry. The company produces only when it receives orders and, therefore, has no inventories. The following information is available for the current month:
Actual (based on actual orders for 392,000 units)
Master Budget (based on budgeted orders for 350,000 units)
Sales revenue
$ 7,448,000
$ 7,000,000
Less
Variable costs
Materials
2,600,000
2,310,000
Direct labor
230,000
210,000
Variable overhead
1,180,000
1,050,000
Variable marketing and administrative
860,000
770,000
Total variable costs
$ 4,870,000
$ 4,340,000
Contribution margin
$ 2,578,000
$ 2,660,000
Less
Fixed costs
Manufacturing overhead
1,560,000
1,580,000
Marketing
475,000
460,000
Administrative
300,000
325,000
Total fixed costs
$ 2,335,000
$ 2,365,000
Operating profits
$ 243,000
$ 295,000
Required:
Prepare a flexible budget for Fournier Fixtures.
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