Kiwi Company produces automobiles. It had budgeted sales and production of 10,000 cars for 2016at a selling price of $5000 each.

The company had budgeted the following costs for 2016:

Standard Variable Manufacturing Costs per unit $4000

Fixed Manufacturing Overhead for the year $3,000,000

Selling and Admin Costs: Variable (per unit) $500

Fixed (total for year) $1,000,000

The company actually sold 11,000 cars for $4800 each. Suppose that at the end of the year the financial results for the period are:

Variable Manufacturing Costs $46,000,000

Variable Selling and Admin Costs $3,500,000

Fixed Manufacturing Costs $2,000,000

Fixed Selling and Admin Costs $1,200,000

Required:

1. What was budgeted profits for 2016? What were actual profits? What was the overall variance in profits? Did the company overall perform better or worse than expected?

2. Compute total master budgets and actuals for:

(a) revenues

(b) variable manufacturing costs

(c) variable selling and admin costs

(d) fixed manufacturing costs

(e) fixed selling and admin costs

Which line items were responsible for the overall profit variance?

3. Compute flexible budgets for:

(a) revenues

(b) variable manufacturing costs

(c) variable selling and admin costs

(d) fixed manufacturing costs

(e) fixed selling and admin costs

4. Compute selling price and volume variances for revenues?