Problem 15-20 Determining sales and variable cost volume variances LO 15-2,15-3,15-4 Franklin Publications established the following standard price and costs for a hardcover picture book that the company produce:s Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs $ 36.60 8.20 4.30 5.40 6.80 Planned fixed costs Manufacturing overhead Selling, general, and administrative $131,000 48,000 Franklin planned to make and sell 29,000 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 28,000 and 30,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 30,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) 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 28,000 and 30,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 30,000 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 Volume Variances Number of units Sales revenue Variable manufacturing costs 29,000 28,000 30,000 Materials Labor Manufacturing overhead Variable selling general, and administrative costs Contribution margin Fixed costs Manufacturing overhead Fixed selling, general, and administrative costs Net income 0 Problem 15-21 Determining and interpreting flexible budget variances LO 15-5 Vernon 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 $ 36.90 8.60 3.60 5.90 7.20 Planned fixed costs Manufacturing overhead Selling, general, and administrative $126,000 51,000 Assume that Vernon actually produced and sold 26,000 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 $ 35.90 8.80 3.50 5.95 7.00 Actual fixed costs Manufacturing overhead Selling, general, and administrative $111,000 57,000 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
