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You will use this information for the next 3 questions. You may want to complete the Flex Budget to answer the following questions. Trek manufactures
You will use this information for the next 3 questions. You may want to complete the Flex Budget to answer the following questions. Trek manufactures bicycles it plans to sell for $800 each. The bicycles require 10 lbs of aluminum each (which is the only direct material), and Trek budgets to purchase each pound of aluminum for $10/lb. The bicycles require 2 hours of labor, which Trek believes it will acquire for $25/hour. The company plans to sell 50,000 bicycles this year. Actual performance was a bit different than planned. Trek actually ended up selling 45,000 bicycles for $600 each. Additionally, the company actually spent a total of $5,000,000 in direct materials for 500,000 pounds of aluminum. Trek actually spent $2,050,000 on direct labor, and Trek had to pay $24/hour. Flex Actual Units 45,000 Selling Price $600 Sales Revenue $27,000,000 Budget 50,000 $800 $40,000,000 Direct Materials Expense $5,000,000 $5,000,000 Direct Labor Expense $2,050,000 $2,500,000 Operating Income $19,950,000 $32,500,000 What is the Sales Volume Variance? Please enter a positive number for your answer. You are not required to indicate whether the variance is favorable or unfavorable
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