This is a comprehensive variance analysis review problem and the only thing that I am unsure about is the efficiency variance when calculating direct materials price and efficiency variance. For the flexible budget, I got $2,268,000, which is the same as the actual input quantity times budgeted price and got a price variance of $189,000 unfavorable, but no efficiency variance, which I feel like is incorrect. Could you please let me know if the efficiency variance of 0 is correct or not, and if not, could you please tell me and explain how I should change it? You may need to zoom in to see some of the information clearly. I really appreciate your help! Thank you very much!
Part 1: Develop a Flexible Budget Performance Report for Ellis Animal Health Company Static Budget Actual FIU lexible Budget Flexible Sales FIU Budget Variance Volume Variance 630,000 Units sold 630,000 70,000 700,000 5.810,000 Revenues $5,166,000 63,000 U 5,229,000 581,000 U $ 2,457,000 Direct materials 189,000 U 2,268,000 252,000 F 2,520,000 Direct labor 106,400 $ 11,900 U 94,500 10,500 F 105,000 Direct marketing 441,000 $ 12,600 453,600 50,400 F 504,000 188,300 312,900 2,816,100 Total Variable Costs 3,004,400 U F 3,129,000 Contribution Margin Fixed costs 2,161,600 251,300 U 2,412,900 268,100 U 2,681,000 1,100,000 110,000 U 990,000 neither 990,000 Net Operating Inoome 1,061,600 361,300 U 1,422,900 268,100 U 1,691,000 |Information for Ellis Animal Health Company who makes vaccines. Budgeted Part 2: Calculate Total Static Budget Variance, Flexible Budget Variance, and Sales Volume Variance. Actual Average Selling Price Per Vial Total Direct Materials Cost Per Vial $ 8.30 $ 8.20 629.400 U $ $ 3.60 $ 3.90 Total Static Budget Variance Direct Manufacturing Labor Cost Per Hour Average labor productivity rate (vials per hour) Sales commission cost per vial Fixed administrative and manufacturing overhead $ 15.20 15.00 $ 100.00 90.00 361,300 Total Flexible Budget Variance $ U $ 268,100 U 0.72 $ 0.70 Total Sales Volume Variance $ 990,000 $ 1,100,000 $ 700,000 $ Sales in Units 630,000 |Part 3: Calculate Direct Materials Price and Efficiency Variances Actual Input Qt X Budgeted Flexible Budget Actual Costs Incurred Price $ 2,457,000 2,268,000 $ 2,268,000 Direct Materials U $ 189,000 $ neither Price Variance Efficiency Variance $ 189,000 U Flexible Budget Variance Part 3: Calculate Direct Manufacturing Labor Price and Efficiency Variances Actual Input GQt X Budgeted Flexible Budget 94,500 Actual Costs Incurred $ 106,400 105,000 $ Direct Manufacturing Labor 1,400 U $ 10,500 U Price Variance Efficiency Variance $ 11,900 U Flexible Budget Variance Part 1: Develop a Flexible Budget Performance Report for Ellis Animal Health Company Static Budget Actual FIU lexible Budget Flexible Sales FIU Budget Variance Volume Variance 630,000 Units sold 630,000 70,000 700,000 5.810,000 Revenues $5,166,000 63,000 U 5,229,000 581,000 U $ 2,457,000 Direct materials 189,000 U 2,268,000 252,000 F 2,520,000 Direct labor 106,400 $ 11,900 U 94,500 10,500 F 105,000 Direct marketing 441,000 $ 12,600 453,600 50,400 F 504,000 188,300 312,900 2,816,100 Total Variable Costs 3,004,400 U F 3,129,000 Contribution Margin Fixed costs 2,161,600 251,300 U 2,412,900 268,100 U 2,681,000 1,100,000 110,000 U 990,000 neither 990,000 Net Operating Inoome 1,061,600 361,300 U 1,422,900 268,100 U 1,691,000 |Information for Ellis Animal Health Company who makes vaccines. Budgeted Part 2: Calculate Total Static Budget Variance, Flexible Budget Variance, and Sales Volume Variance. Actual Average Selling Price Per Vial Total Direct Materials Cost Per Vial $ 8.30 $ 8.20 629.400 U $ $ 3.60 $ 3.90 Total Static Budget Variance Direct Manufacturing Labor Cost Per Hour Average labor productivity rate (vials per hour) Sales commission cost per vial Fixed administrative and manufacturing overhead $ 15.20 15.00 $ 100.00 90.00 361,300 Total Flexible Budget Variance $ U $ 268,100 U 0.72 $ 0.70 Total Sales Volume Variance $ 990,000 $ 1,100,000 $ 700,000 $ Sales in Units 630,000 |Part 3: Calculate Direct Materials Price and Efficiency Variances Actual Input Qt X Budgeted Flexible Budget Actual Costs Incurred Price $ 2,457,000 2,268,000 $ 2,268,000 Direct Materials U $ 189,000 $ neither Price Variance Efficiency Variance $ 189,000 U Flexible Budget Variance Part 3: Calculate Direct Manufacturing Labor Price and Efficiency Variances Actual Input GQt X Budgeted Flexible Budget 94,500 Actual Costs Incurred $ 106,400 105,000 $ Direct Manufacturing Labor 1,400 U $ 10,500 U Price Variance Efficiency Variance $ 11,900 U Flexible Budget Variance
