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I am stuck on the variances part. Please give me all the steps so I know what I am doing wrong. Thank you. The master
I am stuck on the variances part. Please give me all the steps so I know what I am doing wrong. Thank you.
The master budget at Western Company last period called for sales of 225,000 units at $9 each. The costs were estimated to be $3.75 variable per unit and $225,000 fixed. During the period, actual production and actual sales were 230,000 units. The selling price was $9.10 per unit. Variable costs were $4.50 per unit. Actual fixed costs were $225,000. Required: Prepare a profit variance analysis. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) WESTERN COMPANY Profit Variance Analysis Actual Budget Manufacturing Variances Sales Price Variance Flexible Budget Sales Activity Variance Master Budget Sales revenue $ 2,093,000 F $ 2,070,000 $ 45,000 $ 2,025,000 Less: Variable costs 1,035,000 172,500U 862,500 18,7500 843,750 $ 1,058,000 U F $ 1,207,500 $ 26,250 F $ 1,181,250 Contribution margin Less Fixed costs Operating profits 0 0 225,000 833,000 225,000 982,500 $ 225,000 956,250 $ IU $ 26,250 $Step by Step Solution
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