1.During July, neptune Company had actual sales of $144,000 with a volume of 64,
ID: 2486111 • Letter: 1
Question
1.During July, neptune Company had actual sales of $144,000 with a volume of 64,000 units compared to budgeted sales of $156,000 units of $ 65,000 units.
Actual variable cost of goods sold was $108,800, compared to a budget of $109,200. Monthly fixed expenses , budgeted at $22,400 totaled $20,000. interest revenue of $2,000 was earned during July but hadnot beenincluded in the budget.Prepare a flexible budget perfomance report for July and explain Neptune operating income variance.
2. Assume division 1 of the XYZ Company had the following results last year. Division 1 had sales of $15,000,000 with operating income of 1,250,000 and total assets of 7,500,000
what is the division's sales margin, capital turnover and return on Investment ( ROI)
Explanation / Answer
1 Particulars Actual Budgeted Variance= Actual - Budgeted Units sold 64,000.00 65,000.00 1,000.00 Unfavorable Sales 1,44,000.00 1,56,000.00 12,000.00 Unfavorable Less: Cost of goods sold 1,08,800.00 1,09,200.00 400.00 Favorable Less: Fixed expenses 20,000.00 22,400.00 2,400.00 Favorable Add: Interest earned 2,000.00 - 2,000.00 Favorable Net Income 17,200.00 24,400.00 7,200.00 Unfavorable 2 Sales 150,00,000.00 Operating Income 12,50,000.00 Total assets 75,00,000.00 Sales Margin= Operating Income/Sales 8.33% Capital Turnover= Sales/ Assets 200.00% Return on Investment= Operating Income/ Assets 16.67%
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