Question
Use the information provided in Exercise 8-1A. Determine the sales and variable cost volume variances. Classify the variances as favorable (F) or unfavorable (U). Comment
Use the information provided in Exercise 8-1A.
Determine the sales and variable cost volume variances.
Classify the variances as favorable (F) or unfavorable (U).
Comment on the usefulness of the variances with respect to performance evaluation and identify the member of the management team most likely to be responsible for these variances.
Determine the amount of fixed cost that will appear in the flexible budget.
Determine the fixed cost per unit based on planned activity and the fixed cost per unit based on actual activity. Assuming Allard uses information in the master budget to price the company's product, comment on how the fixed cost volume variance could affect the company's profitability.
Compute variances for the following items and indicate whether each variance is favorable (F) or unfavorable (U). Budget Actual For U Item Variance $800 $780 Sales price $720,000 $780,000 $385,000 $360,000 $275,000 $280,000 Sales revenue Cost of goods sold Material purchases at 5,000 pounds Materials usage $180,000 $178,000 960 units Production volume 900 units $60,000 $53,700 Wages at4,000 hours Labor usage at $16 per hour $96,000 $97,000 Researchand development expense $22,000 $49,000 Selling and administrative expenses $40,000Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started