1) RTI Companys master budget calls for production and sale of 18,200 units for $83,720, variable costs of $32,760, and fixed costs of $20,000. During the most recent period, the company incurred $32,200 of variable costs to produce and sell 20,000 units for $85,200. During this same period, the company earned $25,200 of operating income.

Required

1. Determine the following for RTI Company: (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

a. Flexible-budget operating income.

b. Flexible-budget variance, in terms of contribution margin. Was this variance favorable (F) or unfavorable (U)?

c. Flexible-budget variance, in terms of operating income. Was this variance favorable (F) or unfavorable (U)?

d. Sales volume variance, in terms of contribution margin. Was this variance favorable (F) or unfavorable (U)?

e. Sales volume variance, in terms of operating income. Was this variance favorable (F) or unfavorable (U)?

2)

As the new accountant for Cohen & Co., you have been asked to provide a succinct analysis of financial performance for the year just ended. You obtain the following information that pertains to the companys sole product:

Actual Master (Static) Budget Units sold 35,000 40,000 Sales $ 410,000 $ 457,000 Variable costs 240,000 277,000 Fixed costs 154,500 142,000

Required:

1. What was the actual operating income for the period?

2. What was the companys master (static) budget operating income for the period?

3. (a) What was the total master (static) budget variance, in terms of operating income, for the period? (b) Is this variance favorable (F) or unfavorable (U)? (Note: The total master (static) budget variance is also referred to as the total operating income variance for the period.) (If a variance has no amount, select "None" in the corresponding dropdown cell.)

4. The total master (static) budget variance for a period can be decomposed into a total flexible-budget variance and a sales volume variance. (a) What was the total flexible-budget variance for the period? (b) Was this variance favorable (F) or unfavorable (U)? (c) What was the sales volume variance for the period? (d) Was this variance favorable (F) or unfavorable (U)? (Do not round your intermediate calculations. If a variance has no amount, select "None" in the corresponding dropdown cell.)