Gibson Publications established the following standard price and costs for a har

Question

Gibson Publications established the following standard price and costs for a hardcover picture book that the company produces.

Assume that Gibson actually produced and sold 36,000 books. The actual sales price and costs incurred follow:

Required

a. & b. Determine the flexible budget variances and also indicate the effect of each variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

Standard price and variable costs Sales price $ 36.30 Materials cost 8.80 Labor cost 4.20 Overhead cost 6.10 Selling, general, and administrative costs 6.50 Planned fixed costs Manufacturing overhead $ 130,000 Selling, general, and administrative 52,000

Explanation / Answer

Flexible Budget variance Sales revenue (36.30-35.30)*36000 36000 U Variable manufacturing costs Materials (9-8.80)*36,000 7200 U labor (4.20-4.10)*36000 3600 F overhea (6.15-6.10)*36000 1800 U Selling,general & administrative costs (6.50-6.30)*36000 7200 F contribution margin 34200 U fixed costs manufacturing overhead (130000-115000) 15000 F Selling,general & administrative costs 6000 U Net income 25,200 U

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.