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California Company, Inc. Cost Variance Analysis - Flexible Planning Budget For the Period Ended December 31 Expected Planning Budget Flexible per unit Actual Flexible Amounts
California Company, Inc. | ||||||
Cost Variance Analysis - Flexible Planning Budget | ||||||
For the Period Ended December 31 | ||||||
Expected Planning Budget | Flexible per unit | Actual Flexible Amounts | Activity Variance | Favorable [F] or Unfavorable [U] | ||
Items Sales | 300 | 1 | 400 | 100 | F | |
Merchandise Sales | $ 18,000 | 60 | $ 23,520 | |||
Cost of Goods Sold | 6,000 | 20 | 7,920 | |||
Gross Profit | 12,000 | 40 | 15,600 | |||
Expenses: |
| |||||
Wages & Salaries* | 4,500 | fixed | 4,560 | |||
Utilities | 300 | 1 | 300 | |||
Supplies | 1,200 | 4 | 1,100 | |||
Rent* | 1,800 | fixed | 1,890 | |||
Depreciation* | 240 | fixed | 240 | |||
Shipping | 1,500 | 5 | 1,550 | |||
total Expenses | 9,540 | 9,640 | ||||
Net Profit Income | $ 2,460 | $ 5,960 | ||||
*Fixed, does not change with change in sales. |
Classes taken | 500 | 600 | ||||
Revenue ($14/class) | $7,000 | $8,400 | $1,400 | Favorable | ||
Expenses | ||||||
Wages and Salaries | $3,500 | $4,200 | $700 | Unfavorable | ||
Yoga supplies | $250 | $300 | $50 | Unfavorable | ||
Utilities | $500 | $600 | $100 | Unfavorable | ||
Rent | $500 | $500 | ||||
Insurance | $100 | $100 | ||||
Other Expenses | $250 | $300 | $50 | Unfavorable | ||
Total Expense | $5,100 | $6,000 | $900 | Unfavorable | ||
Net Operating Income | $1,900 | $2,400 | $500 | Favorable |
1. use the information above to complete the variance amounts for each line item and indicate whether they are favorable or unfavorable.
2. discuss the possible reasons for some of the variance.
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