Problem 15-20 Determining sales and variable cost volume variances LO 15-2,15-3,15-4 Thornton Publications established the following standard price and costs for a hardcover picture book that the company produces Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs $ 36.40 8.10 4.10 5.40 6.50 lanned fixed costs Manufacturing overhead Selling, general, and administrative $132,000 48,000 Thornton planned to make and sell 39,000 copies of the book Required a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 38,000 and 40,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 40,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). Select "None" if there is no effect (i.e., zero variance).) Master Budget Flexible Budgets 38,000 Volume Variances Number of units 39,000 40,000 Variable manufacturing costs Fixed costs Problem 15-21 Determining and interpreting flexible budget variances LO 15-5 Gibson Publications established the following standard price and costs for a hardcover picture book that the company produces Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs 36.30 8.60 4.50 5.80 6.50 Planned fixed co Manufacturing overhead Selling, general, and administrative $134,000 47,000 Assume that Gibson actually produced and sold 31,000 books. The actual sales price and costs incurred follow: Actual price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs 35.30 8.80 4.40 5.85 6.30 Actual fixed costs Manufacturing overhead Selling, general, and administrative $119,000 53,000 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).) Flexible Budget Variances Sales revenue Variable manufacturing costs Materials Labor Overhead Selling, general,and administrative costs Contribution margin Fixed costs Manufacturing overhead Selling, general, and administrative costs Net income