Please answer 16-35

Please answer 16-35

Please answer 16-35

Please answer 16-35

Please answer 16-35

Please answer 16-35

Please answer 16-35

16-35. Profit Variance Analysis LO 16-4) Refer to the information in Exercise 16-34. The following is the actual income statement (in thousands of dollars) for the year. $7,238 Sales revenue Less variable costs Direct materials 748 Direct labor 1,010 Variable overhead 930 $2,688 Total variable costs Contribution margin $4,550 Less fixed costs Fixed manufacturing overhead 1,050 Non-manufacturing costs 1,230 Total fixed costs $2,280 $2,270 Operating profit Required Prepare a profit variance analysis like the one in Exhibit 16.5. 16-34. Flexible Budget LO 16-2) Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories The master budget calls for the company to manufacture and sell 100,000 liters at a budgeted price of $75 per liter this year. The standard direct cost sheet for one liter of the preservative follows. (2 pounds@$4) $8 (0.5 hours @ $24) 12 Direct materials Direct labor Variable overhead is applied based on direct labor hours. The variable overhead rate is $20 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $10 per unit. All non-manufacturing costs are fixed and are budgeted at $1.2 million for the coming year At the end of the year, the costs analyst reported that the sales activity variance for the year was $270,000 unfavorable. Page 692 Required Prepare a flexible budget for Paynesville for the year Profit Variance Analysis, August-Peak Division Exhibit 16.5 C (2) DE F G K L (1) (3) (4) (5) (6) (7) Master Budget Flexible Actual (based on actual activity of 80,000 units) Budget (based on actual activity of 80,000 units) (based on planned activity of 100,000 units) Sales Activity Variance Marketing and Administrative Manufacturing Variances Sales Price Variances Variance 2 $840,000 3 Sales revenue $ 40,000 F $800,000 $200,000 U $1,000,000 4 Less Variable costs $25,680 U 329,680 304,000 76,000 F 380,000 Variable manufacturing costs 68,000 $442,320 $ 4,000 F 7 Variable selling and administrative 8 Contribution margin 72,000 18,000 F 90,000 $424,000 $ 530,000 $25,680 U 4,000 F $40,000 F $106,000 U Fixed costs 10 200,000 200,000 Fixed manufacturing overhead 195,500 4,50 -0- 11 140,000 140,000 $ 190,000 Fixed selling and administrative costs 132,320 $ 114,500 7,680 F -0 12 Profit $ 84,000 $21,180 U $11,680 F $40,000 F $106,000 U 13 14 The individual cost variances are shown in Exhibit 16.11. 15