Question
Required What were budgeted profits for 2016? What were actual profits? What was the overall variance in profits? Did the company overall perform better or
Required
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What were budgeted profits for 2016? What were actual profits? What was the overall variance in profits? Did the company overall perform better or worse than expected?
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Compute total master budgets and actuals for: (a) revenues
(b) variable manufacturing costs (c) variable selling and admin costs (d) fixed manufacturing costs (e) fixed selling and admin costs Which line items were responsible for the overall profit variance?
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Compute flexible budgets for: (a) revenues
(b) variable manufacturing costs (c) variable selling and admin costs (d) fixed manufacturing costs (e) fixed selling and admin costs
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Compute selling price and volume variances for revenues?
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Compute volume variances and combined price/efficiency variances for variable costs.
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What is the volume variance for fixed manufacturing costs?
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Kiwi has two responsibility centers: production and sales. Production is responsible for efficiently purchasing for and producing the necessary amount of production. Sales is responsible for pricing and therefore the amount sold, as well as for controlling selling and administrative costs. Which combination of variances would you use to evaluate the two departments? Which variances would you view as uncontrollable? Each year a cash bonus of $1000 per person is paid to all the individuals in the department (production or sales) which performed most above expectations. Which department will receive the 2016 bonuses?
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