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

Question

Rooney Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Salea price Materials cost Labor cost Overhead cost Selling, general, and administrative costs $36.30 8.90 3.50 6.10 6.80 Planned fixed costs Manufacturing overhead Selling, general, and administrative $134,000 52,000 Assume that Rooney actually produced and sold 25,000 books. The actual sales price and costs incurred follow Actual price and variable costs $ 35.30 9.10 3.40 6.15 6.60 Salea price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Actual fixed costs Manufacturing overhead Selling, general, and administrative $119,000 58,000

Explanation / Answer

Flexible Budget Variance Sales Revenue ($36.30 - $35.30) x 25,000 units $25,000 Unfavorable Variable manufacturing costs      Materials ($9.10 - $8.90) x 25,000 $5,000 Unfavorable      Labor Cost ($3.50 - $3.40) x 25,000 $2,500 Favorable      Overhead ($6.15 - $6.10) x 25,000 $1,250 Unfavorable      Selling, general and administrative costs ($6.80 - $6.60) x 25,000 $5,000 Favorable Fixed Costs      Manufacturing Overhead ($134,000 - $119,000) $15,000 Favorable      Selling, general and administrative costs ($58,000 - $52,000) $6,000 Unfavorable Net Income $14,750 Unfavorable

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