Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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. Actual Flex Budget Units 45,000 50,000 Selling Price $600 $800 Sales Revenue $27,000,000 $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
Step 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