SnoGo,Inc. ,produces plastic tray used in cafeterias and for snow sledding.
The company's static budget income statement for January follows.It is based on expected sales volume of 5,500 trays.

SnoGo's manufacturing capacity is 6,250 trays.If actual volume exceeds 6,250 trays,the company must expand the plant.In that case,salaries will increase by 10%,depreciation by 15%,and rent by $800.Fixed utilities will be unchanged by any volume increase.
Prepare flexible budget income statements for the company,showing output levels of 5,500,6,000 and 6,500 trays.

Question

SnoGo,Inc. ,produces plastic tray used in cafeterias and for snow sledding.
The company's static budget income statement for January follows.It is based on expected sales volume of 5,500 trays.
  
SnoGo's manufacturing capacity is 6,250 trays.If actual volume exceeds 6,250 trays,the company must expand the plant.In that case,salaries will increase by 10%,depreciation by 15%,and rent by $800.Fixed utilities will be unchanged by any volume increase.
Prepare flexible budget income statements for the company,showing output levels of 5,500,6,000 and 6,500 trays.

Quizplus · Accepted Answer

The Answer of SnoGo,Inc. ,produces plastic tray used in cafeterias and for snow sledding.
The company's static budget income statement for January follows.It is based on expected sales volume of 5,500 trays.
  
SnoGo's manufacturing capacity is 6,250 trays.If actual volume exceeds 6,250 trays,the company must expand the plant.In that case,salaries will increase by 10%,depreciation by 15%,and rent by $800.Fixed utilities will be unchanged by any volume increase.
Prepare flexible budget income statements for the company,showing output levels of 5,500,6,000 and 6,500 trays.

SnoGo,Inc ,Produces Plastic Tray Used in Cafeterias and for Snow