EXHIBIT 14.4 Breakdown of Total Operating Income Variance SCHMIDT MACHINERY COMPANY Analysis of Financial Results For October 2019 (0) (2) Flexible Budget Variances (3) Flexible Budget (4) Sales Volume Variances (5) Master (Static) Budget Actual Units 0 780 2200 1,000 $800,000 450.000 Sales Variable costs Contribution margin Fixed costs Operating income 780 $639,600 350,950 $288,650 160.650 $128.000 $15,600F 50F $15,650F 10,6500 $5,000F $624,000 351,000 $273,000 150,000 $123,000 $175,0000 99,000F $ 77,0000 0 $350,000 150.000 $200.000 $77,000U Analysis of Total Operating-Income Variance Total operating income variance =$128,000 - $200,000=$72,0000 Flexible budget variance = $128,000 - $123,000 $5,000F Sales volume variance $123,000 - $200.000 $77,0000 "Budgeted fixed factory overhead cout S120,000, budgeted fixed selling and administrative expense $30,000 **Also called the total manter attie) budgetarianos Note: U denotes an unfirvarable effect on operating income, F denotes a favorable effect on operating income 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 textExhibit 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 followin variances for December: 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. 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 corresponding dropdown cell.) Actual results Flexible-budget variances Flexible budget Sales volume variances $ Unit sales Sales Variable costs Contribution margin Fixed costs Operating income 116,000 580,000 440,800 139,200 80,000 59,200 Master (static) budget 100,000 $ 500,000 300,000 $ 200,000 91,000 $ 109,000 $ $ Roque 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 Total master (static) budget variance b. Total flexible-budget variance c. Sales volume variance, in terms of operating income d. Sales volume variance, in terms of contribution margin Selling price variance d e.
