Assume that in October $2022$ the Schmidt Machinery Company $($Exhibit $14\mathrm{.}1)$ manufactured

and sold $1,070$ units for $$847$ each. During this month, the company incurred $$460,100$ total

variable costs and $$181,200$ total fixed costs. The master budget data for the month are as

given in Exhibit $14\mathrm{.}1.$

Required:

Prepare a flexible budget for the production and sale of $1,070$ units.

Compute for October $2022$:

a$.$ The sales volume variance, in terms of operating income. Indicate whether this variance

was favorable or unfavorable.

b$.$ The sales volume variance, in terms of contribution margin. Indicate whether this variance

was favorable or unfavorable.

Compute for October $2022$:

a$.$ The total flexible budget variance. Indicate whether this variance was favorable or

unfavorable.

b$.$ The total variable cost flexible budget variance. Indicate whether this variance was

favorable or unfavorable.

c$.$ The total fixed cost flexible budget variance. Indicate whether this variance was favorable

or unfavorable.

d$.$ The selling price variance. Indicate whether this variance was favorable or unfavorable.Assume that in October $2022$ the Schmidt Machinery Company $($Exhibit $14\mathrm{.}1)$ manufactured

and sold $1,070$ units for $$847$ each. During this month, the company incurred $$460,100$ total

variable costs and $$181,200$ total fixed costs. The master budget data for the month are as

given in Exhibit $14\mathrm{.}1.$

Required:

Prepare a flexible budget for the production and sale of $1,070$ units.

Compute for October $2022$:

a$.$ The sales volume variance, in terms of operating income. Indicate whether this variance

was favorable or unfavorable.

b$.$ The sales volume variance, in terms of contribution margin. Indicate whether this variance

was favorable or unfavorable.

Compute for October $2022$:

a$.$ The total flexible budget variance. Indicate whether this variance was favorable or

unfavorable.

b$.$ The total variable cost flexible budget variance. Indicate whether this variance was

favorable or unfavorable.

c$.$ The total fixed cost flexible budget variance. Indicate whether this variance was favorable

or unfavorable.

d$.$ The selling price variance. Indicate whether this variance was favorable or unfavorable.

Exibit $14\mathrm{.}1$

Comparison of Actual and Budgeted Operating Income

$*$U denotes an unfavorable effect on operating income.

$**$F denotes a favorable effect on operating income.

$******$ Actual fixed factory overhead cost $=$$$130,650$; actual fixed selling and administrative costs $=$$$30,000.$

$$ Budgeted fixed factory overhead cost $=$$$120,000$; budgeted fixed selling and administrative costs $=$$$30,000.$