Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales

Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales revenue, $410,000; variable costs, $255,000; fixed costs, $101,000. Actual results for the year were as follows: sales revenue, $355,000; variable costs, $226,000; fixed costs, $97,000. The flexible-budget operating income for the year was $36,000.

a. What is the total master (static) budget variance in operating profit for the period?

b. What portion of the total master (static) budget variance is attributable to actual sales volume being different from planned sales volume?

c. What portion of the total variance is due to a combination of selling price and costs (variable cost per unit and total fixed costs) being different from budgeted amounts?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost management a strategic approach

Authors: Edward J. Blocher, David E. Stout, Gary Cokins

5th edition

73526940, 978-0073526942

More Books

Students also viewed these Accounting questions