emporary furniture manufactures office desks. The firm budgeted to sell 5,000 de

Question

emporary furniture manufactures office desks. The firm budgeted to sell 5,000 desks st 6 Budgeted costs include S80 variable cost per desk, and S200,000 fixed eayar i oually sold 6,000 desks at 5190, and incurred $78 variable cost per desk and $220,00 Required Prepare a variance analysis report identifying both flexible budget and sales-volume variances. $200 per desk in per desk and $220,000 fixed cost for the year. costiyear. In 2016 the company component variances as (F) (favorable) or (U) (unfavorable). Label all Actual Flexible Sales Volume F or U BudgetVariance Master Budget Flexible F or U Results 6,000 1,140,000 2 Budget Variance Units Sold 6,000 1.000F5,000 Sales Revenue $1,000,000 $400,000 Total Variable Costs $600,000 Contribution? Margin $200,000 Total Fixed? Costs $400,000 Operating? Income

Explanation / Answer

Prepare variance analysis :

Actual results Flexible budget variance Flexible budget Sales volume variance Planninng budget Unit sold 6000 6000 5000 Sales 1140000 60000 U 1200000 200000 F 1000000 Variable cost 468000 12000 F 480000 80000 U 400000 Contribution margin 672000 48000 U 720000 120000 F 600000 Fixed cost 220000 20000 U 200000 None 200000 Net operating income 452000 68000 U 520000 120000 F 400000

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