Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company...
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Accounting
Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 138,000 liters at a budgeted price of $360 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Variable overhead is applied based on direct labor hours. The variable overhead rate is $210 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $105 per unit. All non-manufacturing costs are fixed and are budgeted at $3.1 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $1,068,000 unfavorable. Required Prepare a flexible budget for Paynesville for the year. (Enter your answers in thousands of dollars.)
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