Question 1

The Ace Company sells a single product at a budgeted selling price per unit of $76. Budgeted fixed manufacturing costs for the coming period are $26,000, while budgeted fixed marketing expenses for the period are $32,000. Budgeted variable costs per unit include $18 of selling expenses (commission) and $20 of manufacturing costs. What is the budgeted operating income if the anticipated sales volume for the period is (1) 11,600 units, and (2) 16,600 units?

Davidson Corp. produces a single product: fireproof safety deposit boxes for home use. The budget going into the current year anticipated a selling price of $60 per unit. Because of competitive pressures, the company had to cut selling prices by 5% during the year. Budgeted variable costs per unit are $37, and budgeted total fixed costs are $158,500 for the year. Anticipated sales volume for the year was 12,500 units. Actual sales volume was 10% less than budget. (1) What was the sales price variance for the year? (2) Label this variance F (favorable) or U (unfavorable), as appropriate. (Do not round intermediate calculations.)