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.