Question
Lloyd Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price
| Lloyd Publications established the following standard price and costs for a hardcover picture book that the company produces. |
| Standard price and variable costs | |||
| Sales price | $ | 36.00 | |
| Materials cost | 8.80 | ||
| Labor cost | 4.20 | ||
| Overhead cost | 6.00 | ||
| Selling, general, and administrative costs | 7.00 | ||
| Planned fixed costs | |||
| Manufacturing overhead | $ | 127,000 | |
| Selling, general, and administrative | 51,000 | ||
| | |||
| Assume that Lloyd actually produced and sold 40,000 books. The actual sales price and costs incurred follow. |
| Actual price and variable costs | |||
| Sales price | $ | 35.00 | |
| Materials cost | 9.00 | ||
| Labor cost | 4.10 | ||
| Overhead cost | 6.05 | ||
| Selling, general, and administrative costs | 6.80 | ||
| Actual fixed costs | |||
| Manufacturing overhead | $ | 112,000 | |
| Selling, general, and administrative | 57,000 | ||
| | |||
| Required: |
| a.&b. | Determine the flexible budget variances and also indicate the effect of each variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) |
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Contemporary Auditing
Authors: Knapp, Rittenberg
1st Edition
1133731244, 978-1133731245
