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Pblem 6-27 (Part Level Submission)

Barnes Entertainment Corporation prepared a master budget for the month of November that was based on sales of 159,100 board games. The budgeted income statement for the period is as follows.

Sales Revenue    $2,545,600

Variable expenses     

  Direct materials  $700,040   

  Direct labor  381,840   

  Variable overhead  493,210   

Total variable expenses    1,575,090

Contribution margin    970,510

Fixed overhead  258,100   

Fixed selling and administrative expenses  504,300   

Total fixed expenses    762,400

Operating income    $208,110

During November, Barnes produced and sold 187,900 board games. Actual results for the month are as follows.

Sales Revenue    $2,995,000

Variable expenses     

  Direct materials  $813,060   

  Direct labor  467,460   

  Variable overhead  593,490   

Total variable expenses    1,874,010

Contribution margin    1,120,990

Fixed overhead  274,300   

Fixed selling and administrative expenses  504,300   

Total fixed expenses    778,600

Operating income    $342,390

arning

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