Question 2 (7 Marks) Case 1 (4 Marks) The Sands Manufacturing Company in Dubai requires...
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Question 2 (7 Marks) Case 1 (4 Marks) The Sands Manufacturing Company in Dubai requires you to prepare a flexible budget based on the information provided on the table below. Budgeted Amounts per unit Units of production Unit Amount Sales 25 Variable Costs Direct Materials 8 Direct Labor Factory Overhead Fixed Costs $40,000 6 Actual Amounts Units of production 20.000 S 600.000 Sales Variable Costs Direct Materials Direct Labor Factory Overhead Fixed Costs 170,000 110.000 75.000 50,000 Required 1. Complete the table below using 20,000, 30,000 and 40,000 units of production. 2. Using the actual amounts from the table above, determine the variances from the budgeted amounts and disclose if the variances are favorable or unfavorable at the 20,000 unit's level. Answer Budgeted Amounts Actual Variance Favorable Unfavorable Units of production 20.000 Unit Amount 25 600,000 Sales Variable Costs Direct Materials Direct Labor Factory Overhead Total Variable Costs Contribution Margin Fixed Costs Net Income 8 6 4 18 170,000 110,000 75,000 355,000 245.000 50.000 195,000
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