Question 1

Sheridan Entertainment Corporation prepared a master budget for the month of November that was based on sales of 153,700 board games. The budgeted income statement for the period is as follows.

Sales Revenue				$2,612,900
Variable expenses
Direct materials		$707,020
Direct labor		368,880
Variable overhead		430,360
Total variable expenses				1,506,260
Contribution margin				1,106,640
Fixed overhead		253,300
Fixed selling and administrative expenses		508,400
Total fixed expenses				761,700
Operating income				$344,940

During November, Sheridan produced and sold 191,000 board games. Actual results for the month are as follows.

Sales Revenue				$3,236,900
Variable expenses
Direct materials		$868,100
Direct labor		472,600
Variable overhead		545,300
Total variable expenses				1,886,000
Contribution margin				1,350,900
Fixed overhead		271,900
Fixed selling and administrative expenses		508,400
Total fixed expenses				780,300
Operating income				$570,600

a) (a) Prepare a flexible budget for November. (Round unit answers to 2 decimal places, e.g. 5.25 & all other answers to 0 decimal places, e.g. 125.)

b) Calculate Sheridans static budget variance for November. (Round answers to 0 decimal places, e.g. 125. Enter all variance amounts as positive values. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

c)Based on the available information, prepare a performance report for management. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.)