0204 Subol Mountain Sports Company went on vacation before completing the subunits monthly responsibility report. This is as far as she got (Click the icon to view the responsibility report) Read the moments Requirements Requirement 1. Complete the responsibility report for this stunt Mountain-Subunit X Actual Flexible Budget Flexible Sales Volume Static 1. Complete the responsibility report for this unit. Revenue by Product Results Variance Budget Variance Budget 2 Based on the data presented, what type of responsibility Center is this Downh-RI $ 323,000 s 16.000 $ 298,000 Suburi Which tema should be investigated part of management's decision criter is to investigate all variances exceeding $10.0007 HOCA Data Table Print Done aasir 5 Mountain Subunit Revenue by Product Down Down II Cross EXI Cross-EXHI $ Actual Flexible Budget Results Variance 323.000 151.000 285 000 $ 1.000 252.000 428,000 6.000 1.437.000 Flexible Sales Volume Static Budget Variance Budget $16.000 FS 2.000 161.000 142.000 285.000 247.000 17.500 U ih 401 000 $ 1,400 500 Snow LXI Total Print Done The accountant for a subunit of Mountain Sports Company went on vacation before completing the subunit's monthly responsibility report. This is as far as she got: her Click the icon to view the responsibility report.) Read the requirements ils sub of res art of $10.0 Done Requirement 1. Complete the responsibility report for this subunit. Responsibility accounting performance reports capture the financial performance of cost, revenue, and profit centers. Responsibility accounting performance reports compare actual results with budgeted amounts and display a variance, or difference between the two amounts. The incomplete responsibility report shows actual results (the actual revenue), the flexible budget, and the static budget. There are also two variances--the flexible budget variance and the sales volume variance Let's begin with the first product. You need to calculate the flexible budget amount before you are able to calculate the variance. The flexible budget amount can be computed by manipulating the formula to calculate the sales volume variance as follows: Static Budget 301,000 +/- Favorable/(Unfavorable) Sales Volume Variance 20,000 Flexible Budget 321,000 Using the amount you calculated above, calculate the flexible budget variance amount. Remember, it is the difference between the flexible budget and the actual amount. Next, determine if the variance is favorable or unfavorable. A favorable variance occurs when actual revenues are greater than budgeted revenues. An unfavorable variance occurs when actual revenues are less than budgeted ct revenues. eol arto 1 $10 Done PikeSubunit Actual Flexible Budget Flexible Sales Volume Static Revenue by Product Results Variance Budget Variance Budget Downhill-RI $ 325,000 $ 4,000 F's 321,000 $ 20,000 F $ 301,000 Next, solve the missing variance amounts for the next product. Remember, the sales volume variance is the difference between the static budget and the flexible budget. Make sure you select whether the variances are favorable or unfavorable. PikeSubunit X Actual Flexible Budget Flexible Sales Volume Static Revenue by Product Results Variance Budget Variance Budget Downhill RI $ 325,000 $ 4,000 F $ 321,000 $ 20,000 F $ 301,000 Downhill-RII 155,000 13,000 U 168,000 21,000 Ft 147,000 bunit X oduct act B of $ Sales Volume Static art 51 Dor ole Calculate the sales volume variance amount for the Cross-Exi. Determine whether the amount is a favorable or unfavorable variance. PikeSubunit X Actual Flexible Budget Flexible Revenue by Product Results Variance Budget Variance Budget Downhill-RI $ 325,000 $ 4,000 F $ 321,000 $ 20,000 F $ 301,000 Downhill-RII 155,000 13,000 168,000 21,000F 147,000 Cross-EXI 287,000 1,000 u 288,000 18,000 U 306,000 Calculate the flexible budget variance amount for the Cross-EXII. Determine whether the amount is a favorable or unfavorable variance. -Subunit X PikSubunit X Actual Flexible Budget Flexible Sales Volume Static Product Revenue by Product Results Variance Budget Variance Budget Downhill RI $ 325,000 $ 4,000 F $ 321,000 $ 20,000 $ 301,000 Downhill-RII 155,000 13,000 U 168,000 21,000 F 147,000 Cross-EXI 287,000 1,000 288,000 18,000 U 306,000 Cross-EXII 250,000 7,000 F 243,000 18,500 U 261,500 To complete the missing information for the snow-LXI model. we first need to calculate the flexible budget amount. We can manipulate This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. U of res art of $10,0 Done To complete the missing information for the snow-LXI model, we first need to calculate the flexible budget amount. We can manipulate the flexible budget variance formula to calculate the flexible budget using the table below. (Leave unused cells blank.) Actual $ 421,000 + Unfavorable Flexible Budget Variance Favorable Flexible Budget Variance (6,000) Flexible Budget 415,000 Now, using the amount you calculated above, complete the missing information for the snow-LXi model. Calculate the sales volume variance and determine whether the variance is favorable or unfavorable. PikeSubunit X Actual Flexible Budget Flexible Sales Volume Static Revenue by Product Results Variance Budget Variance Budget Downhill RI 325,000 $ 4,000 F $ 321,000 $ 20,000 F $ 301.000 Downhill-RII 155,000 13,000 U 168,000 21.000 F 147,000 Cross-EXI 287,000 1,000 U 288,000 18,000 U 306,000 Cross-EXII 250.000 7.000 F 243,000 18,500U 261,500 Subunit X Product $ luct 17.000 F of arto S10 Don able Snow-LXI 421,000 6.000 415,000 398,000 Calculate the total of each column. Remember the variance totals are the net of the favorable and unfavorable variances. PikeSubunit x Actual Flexible Budget Flexible Sales Volume Static Revenue by Product Results Variance Budget Variance Budget Downhill-RI $ 325,000 $ 4,000 F $ 321,000 $ 20,000 F $ 301,000 Downhill-RII 155,000 13,000 U 168,000 21,000 F 147,000 Cross-EXI 287,000 1,000 U 288,000 18,000 306,000 Cross-EXII 250.000 7.000 F 243.000 18.500 U 261,500 Snow-LXI 421,000 6,000 F 415,000 17.000 398,000 $ 1,438,000 $ 3.000 F $1,435,000 $ Total 21,500 F $ 1,413,500 Subunit X by Product RI RII Done Requirement 2. Based on the data presented, what type of responsibility center is this subunit? Because cost centers are only responsible for controlling costs, their responsibility reports only include information on actual versus budgeted costs. Likewise, responsibility reports for revenue centers only contain actual versus budgeted revenue. However, profit centers are responsible for both controlling costs and generating revenue. Therefore, their responsibility reports contain actual and Init X budgeted information on both their revenues and costs. Huct Requirement 3. Which items should be investigated if part of management's decision criteria is to investigate all variances exceeding $14.000? Examine the flexible budget variance column of the responsibility report and determine whether any products should be investigated based on the criteria sot by management-variances exceeding $14,000 Now examine the sales volume variance column of the responsibility report and determine whether any products should be investigated based on the criteria set by management. Remember that management's decision criteria is to investigate all variances exceeding $14,000