Use the information provided in Exercise 15-3.

a. Determine the sales volume variances.

b. Classify the variances as favorable (F) or unfavorable (U).

c. Comment on the usefulness of the variances with respect to performance evaluation and identify the member of the management team most likely to be responsible for these variances.

d. Explain why the fixed cost variances are zero.

e. Determine the fixed cost per unit based on planned activity and the fixed cost per unit based on actual activity. Assuming Burrel uses information in the master budget to price the company’s product, comment on how the volume variance could affect the company’s profitability.

Data From Exercise 15-3:-

Burrel Manufacturing Company established the following standard price and cost data.

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Sales price Variable manufacturing cost $7.50 per unit 3.00 per unit Fixed manufacturing cost 3,000 total Fixed selling and administrative cost 1,200 total