Table Manufacturing Company produces one style of tables. the following data per
ID: 2595613 • Letter: T
Question
Table Manufacturing Company produces one style of tables.
the following data pertain to producing one table
Planned production/month
units (one table)
50
Piece of woods (M)
19
Estimated M price
$20
Actual production
Quantity purchased (QP) from M
20
Actual price (AP)
$19
Material volume (efficiency) variance?
A$19, Favorable
B$19, Unfavorable
C$20, Favorable
D$20, Unfavorable
ABC Company estimates the following data for the coming month
Total variable costs
$ 35,000.00
Income tax rate
25%
Contribution margin percentage
40%
Estimated monthly operating fixed costs
$16,000.00
Required minimum net income as percentage of total sales
10%
Find the excess amount of operating income over required minimum.
A$1,500.00
B$2,500.00
C$4,500.00
D$7,333.33
Table Manufacturing Company produces one style of tables.
the following data pertain to producing one table
Planned production/month
units (one table)
50
Piece of woods (M)
19
Estimated M price
$20
Actual production
Quantity purchased (QP) from M
20
Actual price (AP)
$19
Material volume (efficiency) variance?
A$19, Favorable
B$19, Unfavorable
C$20, Favorable
D$20, Unfavorable
ABC Company estimates the following data for the coming month
Total variable costs
$ 35,000.00
Income tax rate
25%
Contribution margin percentage
40%
Estimated monthly operating fixed costs
$16,000.00
Required minimum net income as percentage of total sales
10%
Explanation / Answer
Standard Actual Particulars Qty Rate amount Qty Rate amount Materials 19.00 20.00 380.00 20.00 19.00 380.00 Materials Volume (Efficiency ) Variance = (SQ - AQ)*SP DMQV= (19 - 20)20 DMQV= 20 U D$20, Unfavorable Statementshowing Computations Paticulars Amount Sales= 35m/.60 58,333,333.33 Less Variable Expenses 35,000,000.00 Contribution Margin 23,333,333.33 Fixed cost (16,000,000.00) Net operating income 7,333,333.33 Required minimum net income = 58,333,333.33*10% 5,833,333.33 excess amount of operating income over required minimum 1,500,000.00
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