Baird Manufacturing Company established the following standard price and cost da

Question

Baird Manufacturing Company established the following standard price and cost data: Sales price Variable manufacturing cost Pixed manufacturing cost Fixed selling and administrative cost $ 8.40 per unit $ 3.60 per unit $2,600 total $600 total Baird planned to produce and sell 2,400 units. Actual production and sales amounted to 2,500 units. Required a. Determine the sales and variable cost volume variances. b. Classify the variances as favorable (F) or unfavorable (U). d. Determine the amount of fixed cost that will appear in the flexible budget. e. Determine the fixed cost per unit based on planned activity and the fixed cost per unit based on actual activity. Complete this question by entering your answers in the tabs below.

Explanation / Answer

Answer A & B

Sales Volume Variance = (Actual units sold - Budgeted units sold ) * Budgeted sales priceper unit

= (2,500 - 2,400) * 8.40 per unit = $840 F

Variable costs volume Variance = (Actual units sold - Budgeted units sold ) * Budgeted Variable cost per unit

(2,500 - 2,400) * 3.60 per unit = $360 U

Answer D

Note : Under flexible budget , fixed costs remains unchanged irrespective of actual level of activity

Answer E

Volume Variance Sales $840 F Variable manufacturing $360 U

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