The Richfield Company produces engine parts for car manufacturers. A new accountant intern at Richfield 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 $0 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.) Static Budget 97,000 Units sold Revenues (sales) $ Actual Flexible-Budget Results Variance 102,000 0 693,600 $ 275,400 F $ 440,000_ 215,600 u 253,600 59,800'F' 204,300 6 9,300 49,300 $ 9,500 $ Flexible Sales-Volume Budget Variance 102,000 5,000 F 418,200 $ 20,500 F 224,400 11,000 UN 193,800 9,500' F' 135,000 58,800 $ 9,500 $ 397,700 213,400 Variable costs Contribution margin Fixed costs 184,300 135,000 49,300 $ Operating income Calculate the total static-budget variance to verify your work is accurate. Determine the labels and then enter the amounts to calculate the static-budget variance. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Abbreviation used: CM = contribution margin.) Total flexible-budget variance 9,500 U + + $ Total sales volume variance 9,500 ' F Total static-budget variance $ 0 $ Requirement 2. What are the actual and budgeted selling prices? What are the actual and budgeted variable costs per unit? (Round your answers to the nearest cent.) The actual selling price is $ 6.80 per unit. The budaeted selling price is $ 4.10 per unit. Requirement 2. What are the actual and budgeted selling prices? What are the actual and budgeted variable costs per unit? (Round your answers to the nearest cent.) The actual selling price is $ 6.80 per unit. The budgeted selling price is $ 4.10 per unit. The actual variable cost is $ 4.31 per unit. The budgeted variable cost is $ 2.20 per unit. Requirement 3. Review the variances you have calculated and discuss possible causes and potential problems. What is the important lesson learned here? Actual variable costs increased, causing a(n) unfavorable flexible-budget variable cost variance. This variance could be a result of a(n) increase in direct material prices. (Round percentage to the nearest whole number.) Richfield was able to pass most of the change in direct material prices on to its customers. Actual selling price by approximately 66 %, bringing about an offsetting flexible-budget revenue variance. increased A(n) increase in the actual number of units sold contributed to more favorable results. Richfield's customers may have stocked up anticipating future increases in direct material prices. The important lesson learned here is that O O A. a superficial examination of summary level data may be insufficient. It is imperative to scrutinize data at a more detailed level. Had Richfield not been able to pass costs on to customers, losses might have been considerable. B. an examination of summary level data is usually sufficient. As long as sales-volume variances are favorable, it is not imperative to scrutinize data at a more detailed level. C. a superficial examination of summary level data may be insufficient. It is imperative to scrutinize data at a more detailed level. Had Richfield not been able to pass cost savings on to customers, losses might have been considerable. D. an examination of summary level data is usually sufficient. As long as the company has an actual operating income and not an actual operating loss, it is not imperative to scrutinize data at a more detailed level. Data Table Performance Report Year Ended December 31, 2017 Flexible-Budget Flexible Variances Budget Sales-Volume Static Actual Results 102,000 Variances Budget 97,000 Units sold Revenues (sales) $ 693,600 440,000 397,700 213,400 Variable costs Contribution margin 253,600 204,300 184,300 135,000 Fixed costs 49,300 49,300 Operating income Print Done Done The Richfield Company produces engine parts for car manufacturers. A new accountant intern at Richfield 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 $0 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.) Static Budget 97,000 Units sold Revenues (sales) $ Actual Flexible-Budget Results Variance 102,000 0 693,600 $ 275,400 F $ 440,000_ 215,600 u 253,600 59,800'F' 204,300 6 9,300 49,300 $ 9,500 $ Flexible Sales-Volume Budget Variance 102,000 5,000 F 418,200 $ 20,500 F 224,400 11,000 UN 193,800 9,500' F' 135,000 58,800 $ 9,500 $ 397,700 213,400 Variable costs Contribution margin Fixed costs 184,300 135,000 49,300 $ Operating income Calculate the total static-budget variance to verify your work is accurate. Determine the labels and then enter the amounts to calculate the static-budget variance. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Abbreviation used: CM = contribution margin.) Total flexible-budget variance 9,500 U + + $ Total sales volume variance 9,500 ' F Total static-budget variance $ 0 $ Requirement 2. What are the actual and budgeted selling prices? What are the actual and budgeted variable costs per unit? (Round your answers to the nearest cent.) The actual selling price is $ 6.80 per unit. The budaeted selling price is $ 4.10 per unit. Requirement 2. What are the actual and budgeted selling prices? What are the actual and budgeted variable costs per unit? (Round your answers to the nearest cent.) The actual selling price is $ 6.80 per unit. The budgeted selling price is $ 4.10 per unit. The actual variable cost is $ 4.31 per unit. The budgeted variable cost is $ 2.20 per unit. Requirement 3. Review the variances you have calculated and discuss possible causes and potential problems. What is the important lesson learned here? Actual variable costs increased, causing a(n) unfavorable flexible-budget variable cost variance. This variance could be a result of a(n) increase in direct material prices. (Round percentage to the nearest whole number.) Richfield was able to pass most of the change in direct material prices on to its customers. Actual selling price by approximately 66 %, bringing about an offsetting flexible-budget revenue variance. increased A(n) increase in the actual number of units sold contributed to more favorable results. Richfield's customers may have stocked up anticipating future increases in direct material prices. The important lesson learned here is that O O A. a superficial examination of summary level data may be insufficient. It is imperative to scrutinize data at a more detailed level. Had Richfield not been able to pass costs on to customers, losses might have been considerable. B. an examination of summary level data is usually sufficient. As long as sales-volume variances are favorable, it is not imperative to scrutinize data at a more detailed level. C. a superficial examination of summary level data may be insufficient. It is imperative to scrutinize data at a more detailed level. Had Richfield not been able to pass cost savings on to customers, losses might have been considerable. D. an examination of summary level data is usually sufficient. As long as the company has an actual operating income and not an actual operating loss, it is not imperative to scrutinize data at a more detailed level. Data Table Performance Report Year Ended December 31, 2017 Flexible-Budget Flexible Variances Budget Sales-Volume Static Actual Results 102,000 Variances Budget 97,000 Units sold Revenues (sales) $ 693,600 440,000 397,700 213,400 Variable costs Contribution margin 253,600 204,300 184,300 135,000 Fixed costs 49,300 49,300 Operating income Print Done Done