Required: C. a. Prepare a flexible budget for March. b. Calculate Appliance's static budget variance for March. Will the static budget variance that you calculated in part (b) be useful to management? Why or why not? d. Based on the available information, prepare a performance report for management including flexible budget variance and sales volume variance. e. Comment on the results of your report. f. Suppose that Appliance company has decided to outsource one of its activities because salaries and cost of employee benefits increased. As director of the team responsible for determining the best activity to be outsourced, what must you say to the CEO when meeting with him, explaining why your team chose to outsource the payroll function. Explain to the CEO the impacts of your team's decision on the business (use examples and you can assume any missing information you need to explain), Wish you all the best! EMBA 514: Evaluation Activity - Individual Project Value: 20% Due date: by 11:59 PM Saturday, 5th of Dec, 2020 Activity description: In this activity, you are expected to solve a problem related to management accounting by conducting an independent work using concepts, topics and relevant management accounting tools studied in the Unit to suggest solutions. Problem: Appliance company produces fans. The director prepared a master budget based on sales level of 19,500 fans for the month of March. Below is the budgeted income statement for the period: $3,120,000 Budgeted Income Statement Revenue Variable expenses Direct materials $877,500 Direct labor 390,000 Variable overhead 585,000 Total variable expenses Contribution margin Fixed overhead 325,000 Fixed selling and administrative expenses 650,000 Total fixed expenses Operating income 1.852.500 1,267,500 975,000 $ 292,500 During March, Appliance sold 23,400 fans and had the following actual results: $3,731,000 Actual Income Statement Revenue Variable expenses Direct materials $1,037,400 Direct labor 487,500 Variable overhead 715,000 Total variable expenses Contribution margin Fixed overhead 351,000 Fixed selling and administrative expenses 650,000 Total fixed expenses Operating income 2.239.900 1,491,100 1,001,000 $ 490, 100 Required: C. a. Prepare a flexible budget for March. b. Calculate Appliance's static budget variance for March. Will the static budget variance that you calculated in part (b) be useful to management? Why or why not? d. Based on the available information, prepare a performance report for management including flexible budget variance and sales volume variance. e. Comment on the results of your report. f. Suppose that Appliance company has decided to outsource one of its activities because salaries and cost of employee benefits increased. As director of the team responsible for determining the best activity to be outsourced, what must you say to the CEO when meeting with him, explaining why your team chose to outsource the payroll function. Explain to the CEO the impacts of your team's decision on the business (use examples and you can assume any missing information you need to explain), Wish you all the best! EMBA 514: Evaluation Activity - Individual Project Value: 20% Due date: by 11:59 PM Saturday, 5th of Dec, 2020 Activity description: In this activity, you are expected to solve a problem related to management accounting by conducting an independent work using concepts, topics and relevant management accounting tools studied in the Unit to suggest solutions. Problem: Appliance company produces fans. The director prepared a master budget based on sales level of 19,500 fans for the month of March. Below is the budgeted income statement for the period: $3,120,000 Budgeted Income Statement Revenue Variable expenses Direct materials $877,500 Direct labor 390,000 Variable overhead 585,000 Total variable expenses Contribution margin Fixed overhead 325,000 Fixed selling and administrative expenses 650,000 Total fixed expenses Operating income 1.852.500 1,267,500 975,000 $ 292,500 During March, Appliance sold 23,400 fans and had the following actual results: $3,731,000 Actual Income Statement Revenue Variable expenses Direct materials $1,037,400 Direct labor 487,500 Variable overhead 715,000 Total variable expenses Contribution margin Fixed overhead 351,000 Fixed selling and administrative expenses 650,000 Total fixed expenses Operating income 2.239.900 1,491,100 1,001,000 $ 490, 100
