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The Precious Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in contribution margin format for
The Precious Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in contribution margin format for December EEB Click the icon to view the performance report in contribution margin format.) Read the requirements Requirement 1. What is the budgeted sales price per unit? The budgeted sales price per unit is $ Requirements Data Table 1. What is the budgeted sales price per unit? 2. What is the budgeted variable expense per unit? 3. What is the budgeted fixed cost for the period? 4. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or The Precious Balloon Company Actual vs. Budget Performance Report For the Month Ended December 31 unfavorable (U.) 5. Management would like to determine the portion of the master budget variance that is (a) due to volume Master Master Budget Actual Budget Variance being different than originally anticipated, and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these questions, using the actual sales volume of 58,000 units and the budgeted sales volume of 52,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 47,000 to 73,000 units. Sales volume (number of cases sold) Sales revenue 52,000 S 171,800 $ 150,800 78,000 $ 83,300 $ 72,800 64.000 $ 17,500 8,800 58,000 6. Using the flexible budget performance report you prepared for Requirement 5, answer the following questions a. How much of the master budget variance (calculated in Requirement 4)for operating income is 88,500 Less: Variable expenses Contribution margin Less: Fixed expenses Operating income due to volume being higher than expected? How much of the master budget variance for variable expenses is due to some cause other than volume? What could account for the flexible budget variance for sales revenue? What is the volume variance for fixed expenses? Why is it this amount? b. 65,800 c. d. PrintDone Print Done
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