As part of its comprehensive planning and control system,...
Required information [ The following information applies to the questions displayed below . ] AS part of its comprehensive planning and control system , Mopar Company uses a master budget and subsequent variance analysis ."You are given the following information that pertains to the company's only product ,* L - 10 , for the month Of December .\\ Required :` 1 . Using text Exhibit 14. 4 as a guide , complete the missing parts of the following profit report for December ." 2. Based on your completed profit report , determine the dollar amount , and label ( Favorable or Unfavorable ; each of the following* variances for December .` 2 . Total master ( static ) budget variance ( also referred to as the total operating income variance for the period ) . 60 . Total flexible -budget variance .\\ c . Sales Volume Variance , in terms of operating income* d . Sales volume variance , in terms of contribution margin E . Selling price Variance. Complete this question by entering your answers in the tabs below . Required 1 Required ? Using text Exhibit 14 . 4 25 a guide , complete the missing parts of the following profit report for December . ( If a variance has no amount , select " None " in the Corresponding dropdown cell .] Actual results Flexible - budget variances Flexible Sales volume variances Master ( static ) budget budget Unit sales 717, 000 105, 000 Sales 505, 000 525,000 Variable costs $44, 600 315,000 Contribution margin 140, 400 210, 000 Fixed costs 79, 000 9 2,000 Operating income 61, 400 $ 118, 000Required 1 Required 2 2. Based on your completed prot report, determine the dollar amount, and label {Favorable or Unfavorable\" each ofthe following variances for December: (If a variance has no amount, select "None" in the corresponding dropdown cell.) a. Total master [static] budget variance (also referred to as the total operating income variance for the period). b. Total exiblebudget variance. c. Sales volume variance, in terms of operating income. d. Sales volume variance, in terms of contribution margin. e. Selling price variance. Show less: Total master {static} budget variance Total exible-budget variance c. Sales volume variance, in terms of operating income Sales volume variance, in terms of contribution margin Selling price variance EXHIBIT 14. 4 Breakdown of Total Operating Income Variance* SCHMIDT MACHINERY COMPANY Analysis of Financial Results For October 2019 171 ( 2) (3) (4) 15) Flexible - Budget Flexible* Sales Volume* Master ( Static ) Actual Variances Budget Variances Budget Units 780 780 2204 1.000 Sales $6.39, 600 $ 15 , 50.0 F $524, 000 $ 176, DOOU $800, 000 Variable costs 350, 950 5.0 F 351, 000 95, 00 0F 450,000 Contribution margin $288, 650 $15, 55OF $ 273, 000 $ 7TOOOU $350, 000 Fixed costs 150 , 650 10 . 650U 150, 000 150, 000* Operating income $128, 0:00 $ 5, 00OF $ 123, 000 $ 17, DOOU $ 200,000 Analysis of Total Operating - Income Variance* Total operating - income variance*" = $ 128,000 - $200, 000 = $72, 0004 Flexible -budget variance* Sales volume variance* = $ 128, 000 - $123, 000 = $123,000 - $200, 000 = $5, 00OF = $77, 000U *Budgeted fixed factory overhead cost = $ 120,000` budgeted fixed selling and administrative Expense = $30.0.00 * * Also called the total master (static ] budget Variance .` Note : IT denotes an unfavorable effect on operating income ; I denotes a favorable effect on operating Income
