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Acct. 292 - Managerial Accounting Variance Analysis Problem Kevin Jarvis is the controller of Bitterroot Industries. Kevin prepared the following budgeted income statement at various
Acct. 292 - Managerial Accounting Variance Analysis Problem Kevin Jarvis is the controller of Bitterroot Industries. Kevin prepared the following budgeted income statement at various levels of sales. After careful review of the budgeted income statements, and after discussions with the sales and production managers, the CEO determines that the best alternative is to base the budget on a sales volume of 30,000 units. 20,000 30,000 40,000 Sales Variable costs Direct material Direct labor Overhead Total variable costs Contribution margin Fixed costs Overhead Rent Insurance Advertising Total fixed costs Operating income $1,240,000 $1,860,000 $2,480,000 340,000 300,000 510,000 450,000 540,000 680,000 600,000 720,000 240,000 360,000 480,000 62,000 46,000 28,000 15,000 151,000 62,000 46,000 28,000 15,000 62,000 46,000 28,000 15,000 Actual results for the year were 28,000 units, reflected in the following income statement: 28,000 Sales Variable costs Direct material Direct labor Overhead Total variable costs Contribution margin Fixed costs Overhead Rent Insurance Advertising Total fixed costs Operating income $1,764,000 504,000 434,000 509,600 1447,600 316,400 64,200 45,800 29,100 14,000 153 100 1. What is the flexible budget variance for direct material
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