Question
The results for July for Brahms & Sons follow: Actual (based on actual sales of 66,000 units) Master Budget (based on budgeted sales of 64,000
The results for July for Brahms & Sons follow:
| Actual (based on actual sales of 66,000 units) | Master Budget (based on budgeted sales of 64,000 units) | ||||||||||
| Sales revenues | $ | 510,000 | $ | 544,000 | |||||||
| Less | |||||||||||
| Variable costs | |||||||||||
| Direct material | 66,000 | 54,400 | |||||||||
| Direct labor | 82,000 | 96,000 | |||||||||
| Variable overhead | 89,000 | 96,000 | |||||||||
| Marketing | 15,800 | 16,000 | |||||||||
| Administration | 14,200 | 16,000 | |||||||||
| Total variable costs | $ | 267,000 | $ | 278,400 | |||||||
| Contribution margin | $ | 243,000 | $ | 265,600 | |||||||
| Less | |||||||||||
| Fixed costs | |||||||||||
| Manufacturing | 111,000 | 106,000 | |||||||||
| Marketing | 24,100 | 16,000 | |||||||||
| Administration | 84,500 | 83,000 | |||||||||
| Total fixed costs | $ | 219,600 | $ | 205,000 | |||||||
| Operating profits | $ | 23,400 | $ | 60,600 | |||||||
Required:
Prepare a profit variance analysis for Brahms & Sons. ( Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
| BRAHMS & SONS | |||||||||||
| Profit Variance Analysis | |||||||||||
| Actual (66,000 units) | Manufacturing Variance | Marketing & Administration Variance | Sales Price Variance | Flexible Budget (units) | Sales Activity Variance | Master Budget (64,000 units) | |||||
| Sales revenues | $510,000 | $544,000 | |||||||||
| Variable costs: | |||||||||||
| Direct material | 66,000 | 54,400 | |||||||||
| Direct labor | 82,000 | 96,000 | |||||||||
| Variable overhead | 89,000 | 96,000 | |||||||||
| Marketing | 15,800 | 16,000 | |||||||||
| Administration | 14,200 | 16,000 | |||||||||
| Contribution margin | $243,000 | $0 | $265,600 | ||||||||
| Fixed costs: | |||||||||||
| Manufacturing | 111,000 | 106,000 | |||||||||
| Marketing | 24,100 | 16,000 | |||||||||
| Administration | 84,500 | 83,000 | |||||||||
| Operating profits | $23,400 | $0 | $60,600 | ||||||||
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
