Determining sales and variable cost volume variances Vlascenko Food Corporation developed the following standard price and costs for a refrigerated TV dinner that the company produces.

Vlascenko plans to make and sell 200,000 TV dinners.
Required
a. Prepare the pro forma income statement that would appear in the master budget.
b. Prepare flexible budget income statements, assuming production and sales volumes of 180,000 and 220,000 units.
c. Determine the sales and variable cost volume variances, assuming volume is actually 190,000 units.
d. Indicate whether the variances are favorable (F) or unfavorable (U).
e. Comment on how Vlascenko could use the variances to evaluate performance.

Transcribed Image Text:

Standard price and variable costs Sales price Materials cost Labor cost $25.96 9.00 2.60 Overhead cost 0.56 Selling, general, and administrative costs Planned fixed costs 4.20 Manufacturing overhead cost Selling, general, and administrative costs $500,000 360,000