Learning Team Assignments From the Readings Resources: Financial Accounting: Tools for Business Decision Making and Managerial Accounting: The Basis for Business Decisions
Prepare responses to the following assignment from the e-texts:
A?· Ch. 23: Exercises 23.10 & 23.12 of Managerial Accounting: The Basis for Business Decisions
EXERCISE 23.10 Preparing a Flexible Budget LO6 The flexible budget at the 70,000-unit and the 80,000-unit levels of activity is shown below. 70,000 Units 80,000 Units 90,000 Units Sales $1,400,000 $1,600,000 Cost of goods sold 840,000 960,000 Gross profit on sales $560,000 $640,000 Operating expenses($90,000 fixed) 370,000 410,000 Operating income $190,000 $230,000 Income taxes (30% of operating income) 57,000 69,000 Net income $133,000 $161,000
Complete the flexible budget at the 90,000-unit level of activity. Assume that the cost of goods sold and variable operating expenses vary directly with sales and that income taxes remain at 30 percent of operating income.