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Edison Electronics produces wireless headphones. Management planned to make and sell 9,000 sets of headphones during the year and determined the standard price and cost

Edison Electronics produces wireless headphones. Management planned to make and sell 9,000 sets of headphones during the year and determined the standard price and cost data to be as follows:

Standard price and variable costs

Sales

$135.00 per unit

Raw Materials

$33.20 per unit

Direct Labor

$42.50 per unit

Overhead

$19.70 per unit

Planned fixed costs

Manufacturing overhead

$98,000

Selling, general and administrative costs

$138,000

Edison Electronics actually produced and sold 9,700 sets of headphones for the year. Actual sales and costs for the year were as follows:

Sales

$1,285,300

Variable costs

Raw Materials

$335,600

Direct Labor

$405,500

Overhead

$180,400

Fixed costs

Manufacturing overhead

$102,500

Selling, general and administrative costs

$134,800

2. Using the information provided in Problem No. 1 above related to Edison Electronics, perform the following managerial accounting analysis:

Required:

  1. Prepare the flexible budget showing the sales and each cost line as a separate line item.

b. Determine the sales and variable cost volume variances and indicate whether each variance is favorable or unfavorable

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