Prepare a static budget in excel for vroom-vroom

Assignment Help Accounting Basics

Reference no: EM132461740

Problem 1: Prepare a static budgetin Excel for Vroom-Vroom based on 200,000 units produced.

a) Show the static budget for December in Contribution Margin Income Statement format.

b) Compare December's static budget to December's actual results. Specify which line items are favorable or unfavorable and how much.

c) For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for December. Provide potential explanations for each one.

d) Show the static budget for January in Contribution Margin Income Statement format.

e) Compare January's static budget to January's actual results. Specify which line items are favorable or unfavorable and how much.

f) For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for January. Provide potential explanations for each one.

Problem 2: Prepare a flexible budgetin Excel for Vroom-Vroom.

g) Show the flexible budget for December in Contribution Margin Income Statement format.

h) Compare December's flexible budget to December's actual results. Specify which line items are favorable or unfavorable and how much.

i) For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for December. Provide potential explanations

j) Show the flexible budget for January in Contribution Margin Income Statement format.

k) Compare January's flexible budget to January's actual results. Specify which line items are favorable or unfavorable and how much.

l) For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for January. Provide potential explanations for each one.

Problem 3: Analyze the differences between static and flexible budgets. (28 points)

m) What is the difference between the static and flexible budgets?

n) What are the pros and cons for each - static and flexible budgets?

o) Write a letter to Vroom-Vroom's CFO. Explain the results in December and January. Provide your recommendation for either static or flexible budgets. Provide explanations and backup for your recommendation.

Attachment:- backup.rar

Reference no: EM132461740

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