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11291201 8 32 MyAcoountingLab Homework: Chapters 22 and 23wSyed Jaffry Student: Syed Jaffry Date: 01/28/18 Instructor: Abigail Feloney, Kelly Flannagan O'Sullivan Course: ACC-202T3852 Managerial Accounting 18EW3 Assignment: 3-2 MyAccountingLab Homework: Chapters 22 and 23 4. England Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2016 exible budget shows output levels of 8,000, 9,500, and 11,500 units. The static budget was based on expected sales of 9,500 units. 1(Click the icon to View the exible budget.) The company sold 11,500 units during July, and its actual operating income was as follows: 2(Click the icon to view the income statement.) Read the regulrementsa. Requirement 1. Prepare a exible budget performance report for July. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)lUnfavorab|e (U) input blank.) England Technologies Flexible Budget Performance Report For the Month Ended July 31, 2016 1 2 3 4 5 (1) - (3) (3) - (5) Budget Flexible Sales Amounts Actual Budget Flexible Volume Static Per Unit Results Variance Budget Variance Budget Units Sales Revenue Variable Expenses Contribution Margin Fixed Expenses |:| :l: E :III:I: QUE; :I :I 2 E; |_| _l@|_||_l@ _l EEHEE; (11) I (12) :lI) :I) :l ("5) Requirement 2. What was the effect on England's operating income of selling 2,000 units more than the static budget level of sales? Operating Income Selling 2,000 units more than the static budget level of sales (17) England's operating income by $ Requirement 3. What is England's static budget variance for operating income? https:/lxlitemprod.pearsoncmg.comlapilv1/prinacwunting 1/3 1129/2018 32 MyAccountingLab Homework: Chapters 22 and 23wSyed Jaffry England's static budget variance is $ (18) , meaning that its operating income is (19) _ than expected per the static budget. Requirement 4. Explain why the exible budget performance report provides more useful information to England's managers than the simple static budget variance. What insights can England's managers draw from this performance report? Choose two reasons why the exible budget performance report provides England's managers with more information than the simple static budget variance. (20) These variances suggest that the marketing department did a (22) job. They sold (23) units than expected and sold them at a (24) price than expected. 1: Data Table England Technologies Flexible Budget For the Month Ended July 31, 2016 Budget Amount per Unit Units 8,000 9,500 11,500 Sales Revenue $ 23 $ 184,000 $ 218,500 $ 264,500 Variable Expenses 13 104,000 123,500 149,500 Contribution Margin 80,000 95,000 115,000 Fixed Expenses 52,000 52,000 52,000 Operating Income $ 281000 $ 43,000 $ 63,000 2: Data Table England Technologies Income Statement For the Month Ended July 31, 2016 Sales Revenue $ 271500 Variable Expenses 154-700 Contribution Margin 116,800 Fixed Expenses 53000 $ 63,800 Operating Income 3: Requirements https:/lxlitemprod.pearsoncmgcomlapil [print/accounting 112912018 3-2 MyAccountingLab Homework: Chapters 22 and 23wSyed Jaffry 1. Prepare a exible budget performance report for July. 2. What was the effect on England's operating income of selling 2,000 units more than the static budget level of sales? 3. What is England's static budget variance for operating income? 4. Explain why the exible budget performance report provides more useful information to England's managers than the simple static budget variance. What insights can England's managers draw from this performance report? (1) Cl (2) Cl (3) Ci (4) O (5) Cl (6) G (7) O (3) O O F O F O F O F O F O F D F I'D F O U Q U C) U C) U C) U C) U C] U D U (9) O (10) O (11) Cl (12) O C: F O F C) Flexible Budget Variance C) Flexible Budget Variance Cl U Q U 0 Sales Volume Variance 0 Sales Volume Variance (:3 Static Budget Variance (3 Static Budget Variance (13) O (14) Cu" (15) O (16) O (17) (:1 increased C) F O F 0 Flexible Budget Variance O F O decreased C) U C: U 0 Sales Volume Variance O U Cl Static Budget Variance (18) C) favorable (19) 0 higher C) unfavorable 0 lower (20) O C) A favorable sales revenue exible budget variance means the sale price was higher than planned. 0 A favorable sales volume variance reveals whether prots increased due to fewer units being sold. C) A favorable sales volume variance reveals whether prots increased due to more units being sold. C) An unfavorable sales revenue exible budget variance means the sale price was higher than planned. (21) O C) A favorable sales revenue flexible budget variance means the sale price was higher than planned. C) A favorable sales volume variance reveals whether prots increased due to fewer units being sold. C) A favorable sales volume variance reveals whether prots increased due to more units being sold. C} An unfavorable sales revenue exible budget variance means the sale price was higher than planned. (22) Cl good (23) O fewer (24) 0 higher 0 poor 0 more C) lower https:/lxlitemprod.pearsoncmg.comlapilv1lprinUaCCOunting 3/3
