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The Beekman Company produces engine parts for car manufacturers. A new accountant intern at Beekman has accidentally deleted the calculations on the company's variance analysis
The Beekman Company produces engine parts for car manufacturers. A new accountant intern at Beekman has accidentally deleted the calculations on the company's variance analysis calculations for the year ended December 31, 2017. The following table is what remains of the data. Click the icon to view the data.) Read the requirements. Requirement 1. Calculate all the required variances. (If your work is accurate, you will find that the total static-budget variance is $0.) Begin with the flexible budget columns, then the sales volume variance column. Label each variance as favorable (F) or unfavorable (U). (For variances with a 50 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Round your answers to the nearest whole dollar.) Actual Flexible-Budget Flexible Results Variance Budget Units sold 101,000 Revenues (sales) $ 681,750 Variable costs 435,000 Contribution margin 246,750 Fixed costs 175,750 $ 71,000 Operating income 1 Data Table Performance Report Year Ended December 31, 2017 Flexible-Budget Flexible Variances Budget Static Actual Results 101,000 Sales-Volume Variances Budget 98,000 $ Units sold Revenues (sales) Variable costs Contribution margin Fixed costs 681,750 435,000 416,500 220,500 246,750 175,750 196,000 125,000 71,000 $ 71,000 Operating income Requirements 1. Calculate all the required variances. (If your work is accurate, you will find that the total static-budget variance is $0.) 2. What are the actual and budgeted selling prices? What are the actual and budgeted variable costs per unit? 3. Review the variances you have calculated and discuss possible causes and potential problems. What is the important lesson learned here
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