Reference no: EM13877091
Master Budgets, Flexible Budgets, and Profit-Variance Analysis As part of its comprehensive planning and control system, Menendez Company uses a master budget and subsequent variance analysis. You are given the following information that pertains to the company's only product, XL- 10, for the month of December.
Required:
1. Complete the missing parts of the following profit report for December.
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Actual Results
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Flexible-Budget Variance
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Flexible Budget
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Sales Volume Variances
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Master (Static) Budget
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Unit sales
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50,000
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40,000
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Sales
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$450,000
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$400,000
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Variable costs
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375,000
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280,000
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Contribution margin
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$ 75,000
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$120,000
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Fixed costs
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65,000
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75,000
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Operating income
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$ 10,000
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$ 45,000
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2. Based on your completed profit report, determine the dollar amount and label (F or U) each of the following variances for December:
a. Total master (static) budget variance.
b. Total flexible-budget variance.
c. Sales volume variance, in terms of operating income.
d. Sales volume variance, in terms of contribution margin.
e. Selling price variance.