The data for the February master budget columns should come over from the operating budget worksheet. The corrected operating budget worksheet will be provided. Please do not use your submission from Deliverable #1. Verify that the master budget Net Income is the same as that reported in Sheet #1. Complete a flexible budget for February, showing what net income should have been using the operating budget revenue rate, variable expenses' rates, and fixed costs.

1. Given actual results and the operating budgeted rates, prepare a flexible budget for 1 month. Actual operating results for the month are provided. DO NOT CHANGE THIS DATA.
2. Calculate the variances between the flexible budget and actual results, as being either F for favorable or U for unfavorable. Determine how much of the Net Income variance was due to volume and how much was rate-related. Explain deviations from plan. How would you evaluate the actual results? What steps would you take to further investigate and possibly adjust your budget for the rest of the year?

Incremental Analysis: Do We Outsource?

1. Given the relevant costs from the operating budget, prepare a worksheet comparing the relevant data to a vendor's price quote for doing the production currently done in-house.
2. Given avoidable costs, calculate whether the outsourcing decision will save costs in total. Provide an opinion as to whether this business deal is acceptable. Are there any nonfinancial considerations?

1. Given actual results and the operating budgeted rates, prepare a flexible budget for 1 month.
2. Explain deviations from plan.

Incremental Analysis: Do We Outsource? (Week 5)

1. Using the operating budget for the quarter, prepare the relevant costs for in-house production.
2. Given avoidable costs, calculate whether the outsourcing decision will save costs in total.

Share Comments Editing Ideas Sensitivity AutoSave OFF BE S U : Corrected ACCT 301 Course Project Worksheet For Deliverable #2 Home Insert Draw Page Layout Formulas Data Review View Tell me what you want to do Calibri (Body) 11 AA = EE O Conditional Formatting Format as Table Paste BIU A Number Cells v Rum Cell Styles v P20 . x fx | B C D E F G H I J K 2 Conduct Variance Analysis Master Budget Actual Flex Budget Variances (flex. vs. actual) 4 Sales : February per Unit February per Unit February per Unit Total per Unit 5 6 Units 42,500 $ 9.50 35,000 9.85 (B) 7 Total Sales Revenue $ 403,750 $ 344,750 (B) $ - L M N O P Q 3 (F) (A) Verify that the net income is the same as the Op (B) Input the flex budget sales units, the per unit pl (C) Input the flex budget production cost per unit the total flex variable production costs. (D) Input the flex budget variable selling costs per (E) Input the flex budget fixed selling and administ (F) Calculate the variances between the actual and (G) Input the spending variance (H) Calculate the volume variance using the budget $ (c) $ - 9 Variable Costs: 10 Production 11 Selling 12 Total Variable Costs 13 14 Contribution Margin 235,875 $ 4,250 240,125 $ 5.55 190,750 $ 0.10 3,850 5.65 $ 194,600 $ 5.45 0.11 5.56 (F) (F) $ $ . $ - $ 163,625 $ 3.85 $ 150,150 $ 4.29 $ . $ 16 Fixed Costs: 17 Selling 18 Administration 19 Total Fixed Costs 20 21 Net Income 52,500 63,000 115,500 60,000 58,500 118,500 52,500 (E) 63,000 (E) 115,500 $ 48,125 (A) $ 31,650 $ (115,500) $ (16,475) 23 Master Budget vs. Actual Net Income Variance 24 What is the volume variance 25 What is the spending rate variance 27 Operating Budget Cash Budget Variances Decisions Capital + Share Comments Editing Ideas Sensitivity AutoSave OFF BE S U : Corrected ACCT 301 Course Project Worksheet For Deliverable #2 Home Insert Draw Page Layout Formulas Data Review View Tell me what you want to do Calibri (Body) 11 AA = EE O Conditional Formatting Format as Table Paste BIU A Number Cells v Rum Cell Styles v P20 . x fx | B C D E F G H I J K 2 Conduct Variance Analysis Master Budget Actual Flex Budget Variances (flex. vs. actual) 4 Sales : February per Unit February per Unit February per Unit Total per Unit 5 6 Units 42,500 $ 9.50 35,000 9.85 (B) 7 Total Sales Revenue $ 403,750 $ 344,750 (B) $ - L M N O P Q 3 (F) (A) Verify that the net income is the same as the Op (B) Input the flex budget sales units, the per unit pl (C) Input the flex budget production cost per unit the total flex variable production costs. (D) Input the flex budget variable selling costs per (E) Input the flex budget fixed selling and administ (F) Calculate the variances between the actual and (G) Input the spending variance (H) Calculate the volume variance using the budget $ (c) $ - 9 Variable Costs: 10 Production 11 Selling 12 Total Variable Costs 13 14 Contribution Margin 235,875 $ 4,250 240,125 $ 5.55 190,750 $ 0.10 3,850 5.65 $ 194,600 $ 5.45 0.11 5.56 (F) (F) $ $ . $ - $ 163,625 $ 3.85 $ 150,150 $ 4.29 $ . $ 16 Fixed Costs: 17 Selling 18 Administration 19 Total Fixed Costs 20 21 Net Income 52,500 63,000 115,500 60,000 58,500 118,500 52,500 (E) 63,000 (E) 115,500 $ 48,125 (A) $ 31,650 $ (115,500) $ (16,475) 23 Master Budget vs. Actual Net Income Variance 24 What is the volume variance 25 What is the spending rate variance 27 Operating Budget Cash Budget Variances Decisions Capital +