Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling a
ID: 2522812 • Letter: S
Question
Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost $ 8.40 per unit $ 3.80 per unit $2,900 total $ 800 total Stuart planned to produce and sell 2,200 units. Actual production and sales amounted to 2,500 units. Assume that the actual sales price is $8.20 per unit and that the actual variable cost is $4.10 per unit. The actual fixed manufacturing cost is $2,700, and the actual selling and administrative costs are $835 Required a.&b.; Determine the flexible budget variances and classify the effect of each variance by selecting favorable (F) or unfavorable (U) (Select "None" if there is no effect (i.e., zero variance).) Flexible Budget Variances Sales Variable manufacturing Contribution margin Fixed manufacturing Fixed selling and administrative cost Net income (loss)Explanation / Answer
Answers
Flexible Budgets for 2500 units
Actual Results for 2500 units
Flexible Budget variance
Sales
[2500 x $8.4]
$ 21,000.00
[2500 x $8.2]
$ 20,500.00
500
Unfavourable
(-) variable manufacturing
[2500 x $3.8]
$ 9,500.00
[2500 x 4.1]
$ 10,250.00
750
Unfavourable
Contribution margin
$ 11,500.00
$ 10,250.00
1250
Unfavourable
(-) Fixed manufacturing
$ 2,900.00
$ 2,700.00
200
Favourable
(-) Fixed selling & admin
$ 800.00
$ 835.00
35
Unfavourable
Net Income (Loss)
$ 7,800.00
$ 6,715.00
1085
Unfavourable
Flexible Budgets for 2500 units
Actual Results for 2500 units
Flexible Budget variance
Sales
[2500 x $8.4]
$ 21,000.00
[2500 x $8.2]
$ 20,500.00
500
Unfavourable
(-) variable manufacturing
[2500 x $3.8]
$ 9,500.00
[2500 x 4.1]
$ 10,250.00
750
Unfavourable
Contribution margin
$ 11,500.00
$ 10,250.00
1250
Unfavourable
(-) Fixed manufacturing
$ 2,900.00
$ 2,700.00
200
Favourable
(-) Fixed selling & admin
$ 800.00
$ 835.00
35
Unfavourable
Net Income (Loss)
$ 7,800.00
$ 6,715.00
1085
Unfavourable
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