4.1 Please prepare a static-budget-based variance analysis of the March performance. Identify all static budget variances and determine whether they are favorable or unfavorable variances. 4.2 Please prepare a flexible-budget-based variance analysis of the March performance. Identify all flexible-budget-based variances and determine whether they are favorable or unfavorable variances. 4.3 Why might Orchid Corporation find the flexible-budget-based variance analysis more informative than the static-budget-based variance analysis? Explain your reasons. please do not give solution in image format
Orchid Corporation produces pre-packed meal boxes with three pre-made dishes and one soup per meal box. The pre-made dishes and the soup in each meal box are decided and designed by Orchid Corporation and the meal boxes are ordered through Orchid Corporation’s website. The company’s operating budget for March 2021 included these data:
|
Number of meal boxes |
15,000 |
|
Selling price per box |
$ 20 |
|
Variable cost per box |
$ 8 |
|
Fixed costs for the month |
$145,000 |
The actual results for March 2021 were as follows:
|
Number of checkbooks produced and sold |
12,000 |
|
Average selling price per box |
$ 21 |
|
Variable cost per box |
$ 7 |
|
Fixed costs for the month |
$150,000 |
The executive vice president of the company observed that the operating income for March was much lower than anticipated, despite a higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. As the company’s
Orchid Corporation develops its flexible budget on the basis of budgeted per-output-unit revenue and per-output-unit variable costs without detailed analysis of budgeted inputs.
4.1 Please prepare a static-budget-based
4.2 Please prepare a flexible-budget-based variance analysis of the March performance. Identify all flexible-budget-based variances and determine whether they are favorable or unfavorable variances.
4.3 Why might Orchid Corporation find the flexible-budget-based variance analysis more informative than the static-budget-based variance analysis? Explain your reasons.
please do not give solution in image format
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