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Epsilon Technology Scenario: Variance Analysis Data: Epsilon Technology set the following budget and reported actual results for the year: Budgeted Sales Revenue: $1,000,000 Actual Sales
- Epsilon Technology
Scenario: Variance Analysis
Data: Epsilon Technology set the following budget and reported actual results for the year:
- Budgeted Sales Revenue: $1,000,000
- Actual Sales Revenue: $900,000
- Budgeted Variable Costs: $400,000
- Actual Variable Costs: $380,000
- Fixed Costs: $200,000
Requirements:
- Calculate the sales variance for Epsilon Technology.
- Determine the variable cost variance and fixed cost variance.
- Analyze the variances and discuss their implications on Epsilon Technology's financial performance.
- Recommend corrective actions based on the variance analysis to improve profitability.
- Discuss the advantages of using a flexible budget for variance analysis.
- Evaluate the impact of a 5% increase in fixed costs on Epsilon Technology's profitability.
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