The budgeted seliling price was $3.65. Eags are made in batches of 20. In this division we had no beginning or ending inventorys of direct materials or finished goods: Manufacturing overhead is a fixed expense. eaper foc upper managenent, the faster you will become part of upper maragement. "He famed his attention back to the kat of numbers. "Now," he said. T'd beeper get to work. Anything in particular vou want to point out to me?" "Well, I'm glad that you are looking into the DM costs, Uncle Percy, but I still think you're going te find more answers in the DL. "Marbe, hut that's not what my quick anaymin showed. If get back to you with what 1 find." Fercy set to work with the numbers Mies had brought him and those he already had fram the budeet. (once he found them), He Treated a sereadheet that compared the static budget to the actual results and then be inserted a flexble budget in the middle of the two. 1. What are the saatic budget, salesvolume, and fexble boitet vanances for drect materals? Which of these variances wil be the most informutive and why? 2. What are the static budget, sales volume, and flesble bodget variances for direct labor? 3. Does the poblem bieger probleen appear to be in materials or laboe? Why? A Calculace each raw materiars price and quantify (eficiency) variances. 15. Calculate the rate (price) and efficiericy variances for all three fyper of Durect tabor. 6. Diepare a statement for the Moard, detaling what the rect cause of fobsito' problerms with the fiew line inay be Net"- Miles beian 't don't have any specife iseas, but I do inde that ive had quee a few dicustent wah purchaves abeit the cests el the colorful bats and faricy latels being used for this lice of chips and a couple of dacusuiom with wh about the ree hires that are being abuyed to my divition " Milet Aoberts, the firt el hin generation to beceme manager at foberts, had ony recently eaduated with a mentien Ais traniee, he had recently been awigned as the manager of the low sodum chip division. Taures Acbertu, the tele Directoe jumged in, "Tve heard your cemiplaint, Miles, and f really don't think that we've tiven yoa ary aporentice cho makers that are worle than thove roing to other d visient. Niles vook his head. 7I dagre . We are having a teirble time with them, and If wire that is driving. cevtr ve " "No. thow that you are getting the same number of new recruts as everyone else." "Now Lasren's face was the ene turving purle. "Enough." As before, Aust Mary's aim volce cit troough the debate before is could tum into an arement, This isn't helping. Bedve we con start firding soluriens or asyering responiblity, we need to know what hapeened. "The tuened to Percy, who was itll standing by the white board where she had forted down her calculatiens for the sales vanaves. Do you have what rou seed, dearf the asked Tres, ma'amy" Perey repled with a bed. TIget you some bavic numbers on direct materals and the asorentice wages rieht wav, then re move so to miore fletaled analyis." "Cood. And if vou need anything ebe, please lef us krow." fugene jumped back in, finally picking up tis respombll ty as CEO. Rercr nodded to him and the other members of the leadershp team and quetly left the room. Back in his oftior, he added move indormation to the original report. Then he sar dows to wart crunching the: nambers that the Boart needed. Thele Fercy? Miles aibed tentatiody fram his doarway "Ah, 1alles," he aald brikiv te his nephew, motionent him in. "Come in and sif down, Da you have the numberi 1 atked Anrl" Nies hansed him t wheet of nunbers. "I coly breeglt the actual numbers 1 arsume you have the budgeted nambers ince you creared the bodeot for me." Fercy frowhed. "Wel, I can lock them sp, I gwesk, but as would fare been nce to huve them here. it wedd have sred me a stepe eqpecally with the Eaard and the freculive Tears so eacited to get the frickanahnie. Milec fromed 7 guessididmrtherk about that. Fercy anded "Dev't woery about a, Miles, but do hesp in mind that the more you fan do to main ate caver for epper manegement, the failet you heil becoine part of usper managemeet " He tursed his. Woburn chty ine. Frien iny underiendine we lold iosk mote chies than exgected and orfy increased the board for heakh reason. As the obeer of is generation, twgene had been the natural choice arthin the famhr, but he had a fweree termeer when thingt wcet mone. undentandwcle, probable, given the Barefy folined calculing the numbefs this morring. We harent had time to anayde shem yot." Fugrnir' face was otarting to tum purple "Nombers this bad thould hare been agriorityl" he thunateved. "Dat harve bs. 7e * usene, that's enourh." Mary's quet woice stapged the CiO cold. Troukngw at wellas I de that Percy if goof at his ipb ble'll relthe atalysi done and backto on as soan as the can, but we have to give him time. Perhags ifyou had let, him 30 his work insead of caling him into this emergecy reeting, we weuld have the numbers this we nerd. "Fhatont Mafy." Eunene sa di immediately, Mrhough he almost choled on the wordt. the oders inthe Tueene tock a reuple of deeg Eneaths to camt dows and ehph turned back to the group. 'Dses asyone haie ary opecin suseestions or ideas that milht helo Percy's warch foe the problem" wiest and groas marein numbers, and then we cah buciusd f." reviewcs the number. yeu thowed at. The ficrible buthet sales reuphs are bigher than the static tuther fidith. Which imeafn we sold mone chipt than we plaved to, fight 7 As Fercy figdsta. he contifued. "And actual cales retults are kigher than the fiex blo bodget; a'ichimeant oof asting grice: was bicter than we plomind, figit? Agah, he wared for Fercy's nod cefore te conkinued. Aut this ant aloer. Thappened 18 capensespl" Perce thrupgests shoulden. 9 don' anow yet. I bevt ho of anto che eumbera much frane beloce in lotting ine get bata to my calculation." woet in the pather tuviteis?" a at hoparita hear finem you." The budgeted seliling price was $3.65. Eags are made in batches of 20. In this division we had no beginning or ending inventorys of direct materials or finished goods: Manufacturing overhead is a fixed expense. eaper foc upper managenent, the faster you will become part of upper maragement. "He famed his attention back to the kat of numbers. "Now," he said. T'd beeper get to work. Anything in particular vou want to point out to me?" "Well, I'm glad that you are looking into the DM costs, Uncle Percy, but I still think you're going te find more answers in the DL. "Marbe, hut that's not what my quick anaymin showed. If get back to you with what 1 find." Fercy set to work with the numbers Mies had brought him and those he already had fram the budeet. (once he found them), He Treated a sereadheet that compared the static budget to the actual results and then be inserted a flexble budget in the middle of the two. 1. What are the saatic budget, salesvolume, and fexble boitet vanances for drect materals? Which of these variances wil be the most informutive and why? 2. What are the static budget, sales volume, and flesble bodget variances for direct labor? 3. Does the poblem bieger probleen appear to be in materials or laboe? Why? A Calculace each raw materiars price and quantify (eficiency) variances. 15. Calculate the rate (price) and efficiericy variances for all three fyper of Durect tabor. 6. Diepare a statement for the Moard, detaling what the rect cause of fobsito' problerms with the fiew line inay be Net"- Miles beian 't don't have any specife iseas, but I do inde that ive had quee a few dicustent wah purchaves abeit the cests el the colorful bats and faricy latels being used for this lice of chips and a couple of dacusuiom with wh about the ree hires that are being abuyed to my divition " Milet Aoberts, the firt el hin generation to beceme manager at foberts, had ony recently eaduated with a mentien Ais traniee, he had recently been awigned as the manager of the low sodum chip division. Taures Acbertu, the tele Directoe jumged in, "Tve heard your cemiplaint, Miles, and f really don't think that we've tiven yoa ary aporentice cho makers that are worle than thove roing to other d visient. Niles vook his head. 7I dagre . We are having a teirble time with them, and If wire that is driving. cevtr ve " "No. thow that you are getting the same number of new recruts as everyone else." "Now Lasren's face was the ene turving purle. "Enough." As before, Aust Mary's aim volce cit troough the debate before is could tum into an arement, This isn't helping. Bedve we con start firding soluriens or asyering responiblity, we need to know what hapeened. "The tuened to Percy, who was itll standing by the white board where she had forted down her calculatiens for the sales vanaves. Do you have what rou seed, dearf the asked Tres, ma'amy" Perey repled with a bed. TIget you some bavic numbers on direct materals and the asorentice wages rieht wav, then re move so to miore fletaled analyis." "Cood. And if vou need anything ebe, please lef us krow." fugene jumped back in, finally picking up tis respombll ty as CEO. Rercr nodded to him and the other members of the leadershp team and quetly left the room. Back in his oftior, he added move indormation to the original report. Then he sar dows to wart crunching the: nambers that the Boart needed. Thele Fercy? Miles aibed tentatiody fram his doarway "Ah, 1alles," he aald brikiv te his nephew, motionent him in. "Come in and sif down, Da you have the numberi 1 atked Anrl" Nies hansed him t wheet of nunbers. "I coly breeglt the actual numbers 1 arsume you have the budgeted nambers ince you creared the bodeot for me." Fercy frowhed. "Wel, I can lock them sp, I gwesk, but as would fare been nce to huve them here. it wedd have sred me a stepe eqpecally with the Eaard and the freculive Tears so eacited to get the frickanahnie. Milec fromed 7 guessididmrtherk about that. Fercy anded "Dev't woery about a, Miles, but do hesp in mind that the more you fan do to main ate caver for epper manegement, the failet you heil becoine part of usper managemeet " He tursed his. Woburn chty ine. Frien iny underiendine we lold iosk mote chies than exgected and orfy increased the board for heakh reason. As the obeer of is generation, twgene had been the natural choice arthin the famhr, but he had a fweree termeer when thingt wcet mone. undentandwcle, probable, given the Barefy folined calculing the numbefs this morring. We harent had time to anayde shem yot." Fugrnir' face was otarting to tum purple "Nombers this bad thould hare been agriorityl" he thunateved. "Dat harve bs. 7e * usene, that's enourh." Mary's quet woice stapged the CiO cold. Troukngw at wellas I de that Percy if goof at his ipb ble'll relthe atalysi done and backto on as soan as the can, but we have to give him time. Perhags ifyou had let, him 30 his work insead of caling him into this emergecy reeting, we weuld have the numbers this we nerd. "Fhatont Mafy." Eunene sa di immediately, Mrhough he almost choled on the wordt. the oders inthe Tueene tock a reuple of deeg Eneaths to camt dows and ehph turned back to the group. 'Dses asyone haie ary opecin suseestions or ideas that milht helo Percy's warch foe the problem" wiest and groas marein numbers, and then we cah buciusd f." reviewcs the number. yeu thowed at. The ficrible buthet sales reuphs are bigher than the static tuther fidith. Which imeafn we sold mone chipt than we plaved to, fight 7 As Fercy figdsta. he contifued. "And actual cales retults are kigher than the fiex blo bodget; a'ichimeant oof asting grice: was bicter than we plomind, figit? Agah, he wared for Fercy's nod cefore te conkinued. Aut this ant aloer. Thappened 18 capensespl" Perce thrupgests shoulden. 9 don' anow yet. I bevt ho of anto che eumbera much frane beloce in lotting ine get bata to my calculation." woet in the pather tuviteis?" a at hoparita hear finem you