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EXHIBIT 14.4 Breakdown of Total Operating Income Variance SCHMIDT MACHINERY COMPANY Analysis of Financial Results For October 2019 (1) (2) Flexible-Budget Variances (3) Flexible Budget (4) Sales Volume Variances (5) Master (Static) Budget Actual Units 780 0 780 2200 1,000 Sales Variable costs Contribution margin Fixed costs Operating income $639,600 350,950 $288,650 160,650 $128,000 $15,600F 50F $15,650F 10,650U $5,000F $624,000 351,000 $273,000 150,000 $176,000U 99,000F $ 77,0000 0 $800,000 450,000 $350,000 150,000 $123,000 $ 77,000U $200,000 Analysis of Total Operating-Income Variance Total operating-income variar = $128,000-$200,000=$72,000U Flexible-budget variance =$128,000 - $123,000 =$5,000F Sales volume variance = $123,000 - $200,000 =$77,000U *Budgeted fixed factory overhead cost = $120,000; budgeted fixed selling and administrative expense = $30,000 **Also called the total master (static) budget variance. Note: U denotes an unfavorable effect on operating income; F denotes a favorable effect on operating income. Required information (The following information applies to the questions displayed below.) As part of its comprehensive planning and control system, Mopar Company uses a master budget and subsequent variance analysis. You are given the following information that pertains to the company's only product, XL-10, for the month of December, Required: 1. Using text Exhibit 14.4 as a guide, complete the missing parts of the following profit report for December 2. Based on your completed profit report, determine the dollar amount, and label (Favorable or Unfavorable) each of the following variances for December: a. Total master (static) budget variance (also referred to as the total operating income variance for the period). b. Total flexible-budget variance. c. Sales volume variance, in terms of operating income. d. Sales volume variance, in terms of contribution margin. e. Selling price variance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using text Exhibit 14.4 as a guide, complete the missing parts of the following profit report for December. (If a variance has no amount, select "None" in the corresponding dropdown cell.) Flexible Actual results Flexible-budget variances Master (static) budget Sales volume variances budget Unil sales 116.000 100,000 Sales $ 580,000 $ 500,000 Variable costs 440.800 300,000 Contribution margin $ 139.200 $ 200,000 Fixed costs 80.000 91,000 Operating income $ 59 200 $ 109,000 (Required Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 2. Based on your completed profit report, determine the dollar amount, and label (Favorable or Unfavorable)) each of the following variances for December: (If a variance has no amount, select "None" in the corresponding dropdown cell.) a. Total master (static) budget variance (also referred to as the total operating income variance for the period). b. Total flexible-budget variance. c. Sales volume variance, in terms of operating income. d. Sales volume variance, in terms of contribution margin. e. Selling price variance. Show less a. Total master (static) budget variance Total flexible-budget variance b. C. d. Sales volume variance, in terms of operating income Sales volume variance, in terms of contribution margin Selling price variance e.
