Variance analysis, solve for unknowns. Homerun Headgear manufactures and flexible budgets distributes baseball caps to ballparks and other sports venues. Homerun s budget for VARIANCES, AND 2007 forecasts sales of 600,000 caps. However, only 500,000 caps were sold. Based on the data provided in the table below, calculate the missing numbers and complete the analysis.
Variance Analysis for Homerun Headgear for 2007, Incomplete Actual Results (1)
FlexibleBudget Variances (2) = (1) - (3)
Flexible Budget (3)
SalesVolume Variances (4) = (3) - (5)
Static Budget (5)
Units sold 500,000 600,000 Revenues (sales) $6,000,000 $5,760,000 Variable costs 1,680,000 2,160,000 Contribution margin 1,320,000 F 600,000 U Fixed costs 1,380,000 1,200,000 1,200,000 Operating income t_1_t Total flexible-budget variance Total sales-volume variance t_1_t Total static-budget variance Required 1. Calculate the budgeted and actual unit sales price.
2. Assuming that the driver for variable costs is units sold, what are the budgeted and actual variable costs per unit?
3. What is Homerun’s 2007 flexible-budget operating income?
4. What is the total flexible-budget variance?
5. What is the total sales-volume variance?
6. What is the total static-budget variance?