Question
Problem 1) Static budget variance and Flexible budget variance Sonnet Inc. has the following information for March 2018. Master Budget for March 2018 Sales volume....2,100
Problem 1) Static budget variance and Flexible budget variance
Sonnet Inc. has the following information for March 2018.
Master Budget for March 2018 Sales volume....2,100 diskettes
Average selling price per diskette$5.00/diskette
DM costs per diskette..$0.85/diskette
DM cost per lb.$17.00/lb
DM per diskette..0.05 lb/diskette
Direct Labor:
Direct labor cost per hour..$15.00/hr
# of diskettes produced per labor hour.. 30 diskettes
Direct Marketing costs$0.30 /diskette
Fixed overhead costs..$850/month
Actual for March 2018
Sales volume ..1,800 diskettes
Average selling price..$4,80/diskette
DM costs per diskette..$0.80/diskette
DM cost per lb.$20.00/lb
DM per diskette..0.04 lb/diskette
Direct Labor:
Direct labor cost per hour..$15.00/hr
# of diskettes produced per labor hour.. 25 diskettes
Direct Marketing costs$0.30 /diskette
Fixed overhead costs..$820/month
Required: Compute the following:
1) Static-budget variance for operating income (OI).
2) Flexible-budget variance for sales revenue.
3) Flexible-budget variance for OI.
4) Sales-volume variance for OI.
5) Rate (price) and Efficiency (quantity) variance for direct labor cost.
6) Price and Quantity variance for direct material cost.
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