Data-2-Go manufactures and sells flash drives. The company produces only when it

Question

Data-2-Go manufactures and sells flash drives. The company produces only when it receives orders and, therefore, has no inventories. The following information is available for the current month:

Prepare a sales activity variance analysis for Data-2-Go. (Input all amounts as positive values. Leave no cells blank, be certain to insert "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round your intermediate calculations. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)

Data-2-Go manufactures and sells flash drives. The company produces only when it receives orders and, therefore, has no inventories. The following information is available for the current month:

Explanation / Answer

Solution:-

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Flexible Budget
(based on actual
of 425,000 units) Sales Activity Variance Master Budget
(based on
budgeted
400,000 units) Sales revenue 3,612,500 212,500 F 3,400,000 Variable costs: Blank drives 935,000 55,000 U 880,000 Direct labor 223,125 13,125 U 210,000 Variable overhead 414,375 24,375 U 390,000 Variable marketing and administrative 318,750 18,750 U 300,000 Total variable costs 1,891,250 111,250 U 1,780,000 Contribution margin 1,721,250 101,250 F 1,620,000 Fixed costs: Manufacturing overhead 664,063 39,063 U 625,000 Marketing 191,250 11,250 U 180,000 Administrative 127,500 7,500 U 120,000 Total fixed costs 982,813 57,813 U 925,000 Operating profits 738,438 43,438 F 695,000

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