Reference no: EM133169029
Question -
A - Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales revenue, $390,000; variable costs, $258,500; fixed costs, $101,700. Actual results for the year were as follows: sales revenue, $369,000; variable costs, $226,700; fixed costs, $98,400. The flexible-budget operating income for the year was $36,700.
a. What is the total master (static) budget variance in operating profit for the period?
b. What portion of the total master (static) budget variance is attributable to actual sales volume being different from planned sales volume?
c. What portion of the total variance is due to a combination of selling price and costs (variable cost per unit and total fixed costs) being different from budgeted amounts?
B - Davidson Corporation produces a single product: fireproof safety deposit boxes for home use. The budget going into the current year anticipated a selling price of $73 per unit. Because of competitive pressures, the company had to cut selling prices by 10% during the year. Budgeted variable costs per unit are $50, and budgeted total fixed costs are $165,000 for the year. Anticipated sales volume for the year was 19,000 units. Actual sales volume was 5% less than budget. (1) What was the sales price variance for the year? (2) Label this variance F (favorable) or U (unfavorable), as appropriate. (Do not round intermediate calculations.)
C - Chapman Incorporated sells a single product, Zud, which has a budgeted selling price of $24 per unit and a budgeted variable cost of $12 per unit. Budgeted fixed costs for the year amount to $45,000. Actual sales volume for the year (47,000 units) fell 3,000 units short of budgeted sales volume. Actual fixed costs were $46,000. With everything else held constant, what impact did the shortfall in volume have on profitability for the year? (Indicate whether the effect was favorable or unfavorable in terms of its effect on operating income.)
D - Mom's Apple Pie Company uses a standard cost system. The standard direct labor time for each pie is 30 minutes. During the most recent month, the company produced and sold 4,600 pies. The standard direct labor rate is $28.90 per hour; the actual labor rate per hour for the month was $28.60. The company used a total of 2,310 labor hours.
a. What was the direct labor efficiency variance for the month? Was this variance favorable (F) or unfavorable (U)? (Do not round intermediate calculations.)
b. What was the direct labor rate variance for the month? Was this variance favorable (F) or unfavorable (U)? (Do not round intermediate calculations.)