Budgeted CM / Budgeted units sold
= $351,200 / 18,000
= $19.51 per unit
Budgeted FC / 19.51
= 260,000 / 19.51
= 13,326 units
2. Using budget data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) was allocated to planned production? What was the actual per unit cost of production and shipping?
Total budgeted costs (both variable and fixed) = 512,800 + 26,000 = $772,800 Total budgeted units = 18,000
Total expected cost per unit = 772,800 / 18,000 = $42.93
Total actual costs (both variable an fixed) = 432,000 + 261,200 = $693,200
Total actual units = 14,000
Total actual cost per unit = 693,200 / 14,000 = $49.51
3. Comment on the performance report and the plant accountant’s analysis of results. How, if at all, would you suggest the performance report be changed before sending it on to the division manager and Marco Corporation headquarters? The performance report and the plant accountant’s analysis failed to mention the effect on the recent loss of the major customer contract. The difference in sales/revenue would be anticipated with the loss of the major customer thus making units sold decrease from 18,000 units to 14,000 units. This will also lead to the difference with budgeted variable manufacturing costs and shipping costs. The case further indicated that sales were not subject to seasonal fluctuations, thus the decrease of 4,000 units in sale are affected by the loss of the major customer contract. The performance report for May 2004 depicted budget and actual report using two different figures in total units. For true results, both reports should be done using the same figure for units sold....