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Author Question: SnoGo, Inc., produces plastic tray used in cafeterias and for snow sledding.The company's static ... (Read 54 times)

james

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on: Jan 5, 2020
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 Inc
Static Budget Income Statement
Month Ended January 31
Sales revenue $16,500
Variable expenses:
 Cost of goods sold $6,325
 Sales commissions1,375
 Utilities expense 1,100
Fixed expenses:
 Salary expense 3,250
 Depreciation expense2,000
 Rent expense1,000
 Utilities expense      500
Total expenses $ 15,550
Operating income$950

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.
Managerial Accounting, Canadian Edition ¦ Braun, Tietz, Pyper ¦ 2nd Edition
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Marked as best answer by james on Jan 5, 2020

momolu

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Reply #1 on: Jan 5, 2020
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james

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Reply 2 on: Jan 5, 2020
Great answer, keep it coming :)

aliotak

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Reply 3 on: Yesterday
Gracias!

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