EXHIBIT 14.4 Breakdown of Total Operating Income Variance SCHMIDT MACHINERY COMPANY Analysis of Financial Results For October 2019 (1) (2) Flexible-Budget Variances (3) Flexible Budget Sales Volume Variances (5) Master (Static) Budget Actual Units 1,000 Sales Variable costs 7800 780 2200 $639,600 $15,600F $624,000 $176,000U 350,95050F 351,000 99,000F $288,650 $ 77,0000 160,650 10,650U 150,000* 0 $128,000 $ 5,000F $123,000 $ 77,000U Contribution margin Fixed costs $15,650F $273,000 $800,000 450,000 $350,000 150,000 $200,000 Operating income Analysis of Total Operating Income Variance Total operating income variance** =$128,000-$200,000=$72,000U Flexible-budget variance =$128,000 - $123,000 =$5,000F Sales volume variance =$123,000 - $200.000 =$77,000U *Budgeted fixed factory overhead cost = $120,000: budgeted fixed selling and administrative expense = $30,000. **Also called the total master (static) budget variance. Note: U derioles an unfavorable effect on operating incurric; I denotes a favorable effect on opxraling income. Required Information [The following information applies to the questions displayed below.] As part of its comprehensive planning and control system, Mopar Company uses a master budget and subsequent variance analysis. You are given the following Information that pertains to the company's only product, XL-10, for the month of December Required: 1. Using text Exhibit 14.4 as a guide, complete the missing parts of the following profit report for December. 2. Based on your completed profit report, determine the dollar amount, and label (Favorable or Unfavorable) each of the following variances for December: a. Total master (static) budget varlance (also referred to as the total operating Income variance for the period). b. Total flexible-budget varlance. c. Sales volume variance, in terms of operating Income. d. Sales volume varlance, in terms of contribution margin. e. Selling price variance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using text Exhibit 14.4 as a guide, complete the missing parts of the following profit report for December. (If a variance has no amount, select "None" in the corresponding dropdown cell.) Actual results Flexible-budget variances Flexible budget Sales volume variances Unit sales Sales S 105,000 525,000 399,000 126,000 Master (static) budget 91,000 S 455,000 273,000 S 182,000 80,000 S 102,000 Variable costs Contribution margin Fixed costs Operating income S 60,000 68,000 S Required 1 Required 2 > Required 1 Required 2 2. Based on your completed profit report, determine the dollar amount, and label (Favorable or Unfavorable)) each of the following variances for December: (If a variance has no amount, select "None" in the corresponding dropdown cell.) a. Total master (static) budget variance (also referred to as the total operating income variance for the period). b. Total flexible-budget variance. C. Sales volume variance, in terms of operating income. d. Sales volume variance, in terms of contribution margin. e. Selling price variance. Show less a. a b. Total master (static) budget variance Total flexible-budget variance Sales volume variance, in terms of operating income Sales volume variance, in terms of contribution margin Selling price variance d. e.
