Check Mate 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 2020 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 higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. As the company's management accountant, you have been asked to provide explanations for the disappointing September results. Check Mate develops its flexible budget on the basis of budgeted per-output-unit revenue and per-output-unit variable costs withou detailed analysis of budgeted inputs. Read the requirements. Read X Begil Data Table - X X beses) Requirements The budgeted amounts for September 2020 were: Unit Rev 13,000 1. Prepare a static-budget-based variance analysis of the September performance. 2. Prepare a flexible-budget-based variance analysis of the September performance. 3. Why might Check Mate find the flexible-budget-based variance analysis more informative than the static-budget-based variance analysis? Explain your answer. S 23 Number of checkbooks Selling price per book Variable cost per book Fixed costs for the month Varie Con S 7 7 S 140,000 Fixe The actual results for September 2020 were as follows: Opel Print Done 10,700 S 25 Number of checkbooks produced and sold Average selling price per book Variable cost per book Fixed costs for the month S 6 $ 144,900 Print Done Requirement 1. Prepare a static-budget-based variance analysis of the September performance. Begin with the actual results, then compute the static budget and the static-budget variances. Label each variance as favorable or unfavorable. (Enter an operating loss with a minus sign or parentheses.) Static Actual Results Static-Budget Variances Budget Units sold Revenues Variable costs Contribution margin Fixed costs Operating income (loss) Requirement 2. Prepare a flexible-budget-based variance analysis of the September performance. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Enter operating losses with a minus sign or parentheses.) Actual Flexible-Budget Flexible Results Variances Budget Units sold Revenues Variable costs Contribution margin Fixed costs Operating income (loss) fth S st breaks down es ei takes a high-level look at je in flexible-budget variance sales volume variance a n C flexible-budget variance y q sales-volume variance Save for later The primary reason for the static-budget variance is the in unit volume. One explanation for this change is the V actual selling price from the budgeted price. Variable costs relative to the flexbile budget, which could be due to V management or using quality materials
