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The master budget at Western Company last period called for sales of 225,900 units at $9.9 each. The costs were estimated to be $3.84 variable per unit and $225,900 fixed. During the period, actual production and actual sales were 230,900 units. The selling price was $10.00 per unit. Variable costs were $5.40 per unit. Actual fixed costs were $225,900. Required: Prepare a sales activity variance analysis. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) WESTERN COMPANY Sales Activity Variance Flexible Budget Sales Activity Variance Master Budget Sales revenue Less: Variable costs Contribution margin Less Fixed costs Operating profits Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 132,000 liters at a budgeted price of $315 per liter this year. The standard direct cost sheet for one liter of the preservative follows Direct materials Direct labor (2 pounds @ $20) (0.5 hours @ $56) $40 28 Variable overhead is applied based on direct labor hours. The variable overhead rate is $180 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $90 per unit. All non-manufacturing costs are fixed and are budgeted at $2.8 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $942,000 unfavorable. The following is the actual income statement in thousands of dollars) for the year. $40,038 Sales revenue Less variable costs Direct materials Direct labor Variable overhead Total variable costs Contribution margin las fixed costs 4,218 1,170 1.090 $ 6,478 $33,560 PAYNESVILLE CORPORATION Profit Variance Analysis Manufacturing Non-Manufacturing Variances Actual Sales Price Variance Variances Flexible Budget Sales Activity Variance Sales revenue Materials Direct labor 40038 42181 1170 1090 $ of 5.478 33.560 Variable overhead Total variable costs Contribution margin Foxed costs Manufacturing Non-manufacturing Total fixed costs Operating profits 1.210 2.600 30 960 Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 104,000 liters at a budgeted price of $105 per liter this year. The standard direct cost sheet for one liter of the preservative follows Direct materials Direct labor (2 pounds @ $6) (0.5 hours @ $28) $12 14 Variable overhead is applied based on direct labor hours. The variable overhead rate is $40 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $20 per unit. All non-manufacturing costs are fixed and are budgeted at $1,4 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $354,000 unfavorable. The following is the actual income statement in thousands of dollars) for the year. $10,498 Sales revenue Less variable costs Direct materials Direct labor Variable overhead Total variable costs 1. 168 1.310 1.930 $ 4,408 $ 4,408 $ 6,090 Total variable costs Contribution margin Less fixed costs Fixed manufacturing overhead Non-manufacturing costs Total fixed costs Operating profit 1,070 1,250 $ 2,320 $ 3, 770 During the year, the company purchased 180,000 pounds of material and employed 42,400 hours of direct labor. Required: a. Compute the direct material price and efficiency variances. b. Compute the direct labor price and efficiency variances. c. Compute the variable overhead price and efficiency variances. (For all requirements, enter your answers in whole dollars. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) a. b. Direct materials: Price variance Efficiency variance Direct labor: Price variance Efficiency variance Variable overhead: Price variance Efficiency variance Information on Carney Company's fixed overhead costs follows: Overhead applied Actual overhead Budgeted overhead $364,000 391,500 379,000 Required: What are the fixed overhead price and production volume variances? (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Fixed overhead price varjance Fixed overhead production volume variance