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    Flexible Budget Practice Questions Answer

    Uploaded by

    Zain-ul- Farid
    This document provides a flexible budget contribution and profit statement for Atlas Motors. It calculates costs and profits based on operating at 95% capacity. It determines: 1) Sales value of $5,589,605.55 based on a contribution of $1,516,767.69, total fixed costs of $566,609, and total variable costs of $4,072,837.85. 2) Variable costs include direct material of $1,329,999.30, direct labor of $2,305,332.12, and variable overhead of $437,506.44. 3) Fixed costs include production overhead of $272,609, selling and distribution of $162,000

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    Flexible Budget Practice Questions Answer

    Uploaded by

    Zain-ul- Farid
    477 views4 pages
    This document provides a flexible budget contribution and profit statement for Atlas Motors. It calculates costs and profits based on operating at 95% capacity. It determines: 1) Sales value of $5,589,605.55 based on a contribution of $1,516,767.69, total fixed costs of $566,609, and total variable costs of $4,072,837.85. 2) Variable costs include direct material of $1,329,999.30, direct labor of $2,305,332.12, and variable overhead of $437,506.44. 3) Fixed costs include production overhead of $272,609, selling and distribution of $162,000

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    Flexible Budget Practice Questions Answer.xls

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    This document provides a flexible budget contribution and profit statement for Atlas Motors. It calculates costs and profits based on operating at 95% capacity. It determines: 1) Sales value of $5,589,605.55 based on a contribution of $1,516,767.69, total fixed costs of $566,609, and total variable costs of $4,072,837.85. 2) Variable costs include direct material of $1,329,999.30, direct labor of $2,305,332.12, and variable overhead of $437,506.44. 3) Fixed costs include production overhead of $272,609, selling and distribution of $162,000

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    477 views4 pages

    Flexible Budget Practice Questions Answer

    Uploaded by

    Zain-ul- Farid
    This document provides a flexible budget contribution and profit statement for Atlas Motors. It calculates costs and profits based on operating at 95% capacity. It determines: 1) Sales value of $5,589,605.55 based on a contribution of $1,516,767.69, total fixed costs of $566,609, and total variable costs of $4,072,837.85. 2) Variable costs include direct material of $1,329,999.30, direct labor of $2,305,332.12, and variable overhead of $437,506.44. 3) Fixed costs include production overhead of $272,609, selling and distribution of $162,000

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    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
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    Atlas Motors Solution

    Flexible budget contribution and profit statement

    Sales Value W7 5589605.55


    Direct material W1 1329999.3
    Direct labour W2 2305332.12
    Varible overhead W3 437506.44
    Total varaible cost -4072837.8564
    Contribution 1516767.6936
    Fixed production OH w4 272609
    Selling & distribution w5 162000
    Admin ovehead W6 132000
    Total fixed cost 566609
    Profit W7 950158.694
    Working

    75% capacity is 10000


    100% capacity = 10000/.75 13333.3333
    65% capacity = 13333.33*.65 8666.66667
    85% capacity =13333.33*.85 11333.3333
    Required 95% capacity = 13333.33*.95 12666.6667

    W1 Direct material
    1000000/10000=100
    Allowance for future flexible increment 100*1.05= 105
    For 12666.67 unit =12666.66*105 1329999.3

    W2 Direct labour
    1750000/10000=175
    Allowance for future flexible increment 175*1.04= 182
    for 12666.66 units=12666.66*182 2305332.12

    W3 Varaible overhead
    For varible overhead
    (570000-527334)/(10000-8666.66) 31.99934
    Allowance for future flexible increment 31.99*1.08= 34.5492
    for 12666.66 units = 12666.66*34.54 437506.436

    W4 Fixed production OH
    570000-(10000*31.99)= 250100
    Allowance for future flexible increment 250100*1.09 272609

    W5 selling and distribution


    150000 fixed
    Allowance for future flexible increment 150000*1.08 162000

    W6 Administrative overhead
    120000 fixed
    Allowance for future flexible increment 120000*1.10 132000

    For selling price working W7


    converting profit margin of 17% on sales to mark up on cost

    markup to margin = margin%/(1-margin%) .17/(1-.17)= 0.204819277 20.48%


    Total cost = variable cost + fixed cost 4072837.85+566609= 4639447
    profit = total cost* markup % 4640047*.2048= 950158.7
    Sales value =profit+fixed cost+varaible cost
    950158.7+566609+4072837.85 5589605.55
    566609

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