Thomas CoProvides the Following Fixed Budget Data for the Year

question 72

Essay

Thomas Co.provides the following fixed budget data for the year:
$\begin{array}{l}\text { Sales }(20,000 \text { units })&&\$600,000\\\text { Cost of sales: }\\\text { Direct materials } & \$ 200,000 \\\text { Direct labor } & 160,000 \\\text { Variable overhead } & 60,000 \\\text { Fixed overhead } & \underline{80,000}& \underline { 500,000 } \\\text {Gross profit } &&\$100,000\\\text { Operating expenses: } \\\text { Fixed } & \$ 12,000 & \\\text { Variable } &\underline{40,000} &\underline {52,000} \\ \text { Income from operations } &&\underline {\$ 48,000}\\\\\text { The company's actual activity for the year follows: } \\\text { Sales (21,000 units) } && \$ 651,000 \\\text { Cost of goods sold }\\\text { Direct materials } & \$ 231,000 \\\text { Direct labor } & 168,000 \\\text { Variable overhead } & 73,500 \\\text { Fixed overhead } & \underline { 77,500} & \underline { 550,000 }\\\text { Gross profit }&& \$ 101,000\\\text { Operating expenses: }\\ \text { Fixed } & 12,000 \\ \text { Variable } &\underline{39,500} & \underline{51,500}\\ \text { Income from operations } &&\underline{\$ 49,500} \\\end{array}$ Prepare a flexible budget performance report for the year using the contribution margin format.

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Definitions:

Psychological

Pertaining to the mind or to mental states and processes; relating to psychology.

Distress Criterion

A measure used in psychology to determine whether an emotional response to a situation is proportionate to the severity of the event.

Disruptive Behavior

Actions that interrupt or hinder proper function or proceedings, often referring to patterns of negative behavior in educational or social settings.

Societal Norms

Shared expectations and rules that guide behavior of people within social groups, which can vary between different societies or cultures.