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Bank Organizer Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered
Bank Organizer Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September included these data: Click the icon to view the operating budget and actual results. The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higherthanbudgeted selling price and a lowerthanbudgeted variable cost per unit. As the company's management accountant, you have been asked to provide explanations for the disappointing September results. Bank Organizer develops its flexible budget on the basis of budgeted peroutputunit revenue and peroutputunit variable costs without detailed analysis of budgeted inputs. Read the requirements. Requirement Prepare a staticbudgetbased variance analysis of the September performance. Begin with the actual results, then compute the static budget and the staticbudget variances. Label each variance as favorable or unfavorable. Enter an operating loss with a minus sign or parentheses. Actual Results Units sold Revenues Variable costs Contribution margin Fixed costs Operating income loss Requirements Prepare a staticbudgetbased variance analysis of the September performance. Prepare a flexiblebudgetbased variance analysis of the September performance. Why might Bank Organizer find the flexiblebudgetbased variance analysis more informative than the staticbudgetbased variance analysis? Explain your answer. Data table The budgeted amounts for September were: The actual results for September were as follows: Number of checkbooks produced and sold Average selling price per book Variable cost per book
Bank Organizer Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's
bank. The company's operating budget for September included these data:
Click the icon to view the operating budget and actual results.
The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higherthanbudgeted selling price and
a lowerthanbudgeted variable cost per unit. As the company's management accountant, you have been asked to provide explanations for the disappointing September results. Bank Organizer
develops its flexible budget on the basis of budgeted peroutputunit revenue and peroutputunit variable costs without detailed analysis of budgeted inputs.
Read the requirements.
Requirement Prepare a staticbudgetbased variance analysis of the September performance.
Begin with the actual results, then compute the static budget and the staticbudget variances. Label each variance as favorable or unfavorable. Enter an operating loss with a minus sign
or parentheses.
Actual
Results
Units sold
Revenues
Variable costs
Contribution margin
Fixed costs
Operating income loss
Requirements
Prepare a staticbudgetbased variance analysis of the September performance.
Prepare a flexiblebudgetbased variance analysis of the September performance.
Why might Bank Organizer find the flexiblebudgetbased variance analysis more
informative than the staticbudgetbased variance analysis? Explain your answer.
Data table
The budgeted amounts for September were:
The actual results for September were as follows:
Number of checkbooks produced and sold
Average selling price per book
Variable cost per book
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