The accountant at EZ Toys, Inc. is analyzing the production and cost data for it
ID: 2473011 • Letter: T
Question
The accountant at EZ Toys, Inc. is analyzing the production and cost data for its Trucks Division. For October, the actual results and the master budget data are presented below.
Required:
Calculate the actual, flexible budget and static budget income statements. Label the total variance due to cost control and due to activity/volume.
Actual results 10,000 trucks produced and sold Unit selling price Variable costs: Budget data 12,000 trucks planned Unit selling price Unit variable cost: $15 $14 Direct materials Direct labor Variable overhead $52,800 51,000 23,000 $126,800 $9,000 Direct materials Direct labor Variable overhead $5 4 2 $11 $9,600 Total variable costs Fixed overhead Total unit variable costs Fixed overheadExplanation / Answer
EZ Toys Inc. Flexible Budget Data for the Month of October Details Cost Formula Static Budget Flexible Budget Actual Result Activity Variance= Static Budget-Flexible Budget F/U Revenue/Cost Variance=Flexible budget-Actual Results F/U Units Production & Sale 12,000 10,000 10,000 Unit Selling Price 14 168,000 140,000 150,000 28,000 U 10,000 F Unit Variable cost Direct Material 5 60,000 50,000 52,800 10,000 F 2,800 U Direct Labor 4 48,000 40,000 51,000 8,000 F 11,000 U Variable Overhead 2 24,000 20,000 23,000 4,000 F 3,000 U Total Variable cost 11 132,000 110,000 126,800 22,000 F 16,800 U Fixed Overhead 9,600 9,600 9,600 9,000 - 600 F Total Cost 141,600 119,600 135,800 22,000 16,200 U Net Operating Income 26,400 20,400 14,200 6,000 U 6,200 U
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