Managerial accounting

Managerial accounting

Question 1- Master Budget

Standard Delux

Units to be produced

48000

72000

Expected Selling Price

80

150

Standard Cost per pair

Expected units to be sold

1600000

DM

15

1728000

DL

12

24

Variable Overhead

6

12

Fixed Cost per unit

3

6

FC

600000

Master Budget IncomeStatement

 

Standard

Delux

Total

Units produced

48000

72000

 

Units sold/Sales Revenue (Expected)

3840000

10800000

14640000

DM

720000

1728000

2448000

DL

576000

864000

1440000

VC

288000

432000

720000

FC

600000

1200000

1800000

Total Cost

2184000

4224000

6408000

Variable marketing and distribution Expense

192000

288000

480000

Fixed Marketing and customer distribution Expense

200000

200000

400000

Net Income

1264000

6088000

7352000

Actual

Units produced

55000

50000

Units Sold

53000

47000

Selling price

72

148

Direct material used

55800

50400

Direct material price per kg

14.8

31

DL

616000

1111000

DL per wage rate

11

11

VC

720000

720000

 

 

Standard

Delux

 

Units produced

55000

50000

 

Units sold/Sales Revenue (Expected)

3816000

6956000

10772000

DM

825840

1562400

2388240

DL

56000

101000

157000

VC

720000

720000

1440000

FC

480000

480000

960000

Total Cost

2081840

2863400

4945240

Net Income

1734160

4092600

5826760

Variance

470160

-1995400

-1525240

It shows that standard is performing well while the deluxe has produced less units while the cost of manufacturing is also high, on the other hand the selling price was low which has affected the total or overall net income or the profitability of ...