5. The following information is available for Brownstone Products Company for the month of July: Actual Master Budget Units 3,900 4,000 Sales revenue $ 55,500 $ 60,000 Variable manufacturing costs 20,800 16,000 Fixed manufacturing costs 14,000 13,700 Variable selling and administrative expenses 9,500 8,000 Fixed selling and administrative expenses 10,900 10,400 Required: 1. What was the total operating income variance for July? (Note: this variance is also called the master (static) budget variance for the period.) Was this variance favorable (F) or unfavorable (U)? 2. Compute the July sales volume variance and the flexible-budget variance for the month, both in terms of contribution margin and in terms of operating income. 4. Prepare pro forma budgets for activities within its relevant range of operations. Prepare a flexible budget for each of the following two output levels: a. 3,930 units. b. 4,330 units.
5. The following information is available for Brownstone Products Company for the month of July: Actual Master Budget Units 3,900 4,000 Sales revenue $ 55,500 $ 60,000 Variable manufacturing costs 20,800 16,000 Fixed manufacturing costs 14,000 13,700 Variable selling and administrative expenses 9,500 8,000 Fixed selling and administrative expenses 10,900 10,400 Required: 1. What was the total operating income variance for July? (Note: this variance is also called the master (static) budget variance for the period.) Was this variance favorable (F) or unfavorable (U)? 2. Compute the July sales volume variance and the flexible-budget variance for the month, both in terms of contribution margin and in terms of operating income. 4. Prepare pro forma budgets for activities within its relevant range of operations. Prepare a flexible budget for each of the following two output levels: a. 3,930 units. b. 4,330 units.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
5.
The following information is available for Brownstone Products Company for the month of July:
| Actual | ||||||
| Units | 3,900 | 4,000 | ||||
| Sales revenue | $ | 55,500 | $ | 60,000 | ||
| Variable |
20,800 | 16,000 | ||||
| Fixed manufacturing costs | 14,000 | 13,700 | ||||
| Variable selling and administrative expenses | 9,500 | 8,000 | ||||
| Fixed selling and administrative expenses | 10,900 | 10,400 | ||||
Required:
1. What was the total operating income variance for July? (Note: this variance is also called the master (static)
2. Compute the July sales volume variance and the flexible-budget variance for the month, both in terms of contribution margin and in terms of operating income.
4. Prepare pro forma budgets for activities within its relevant range of operations. Prepare a flexible budget for each of the following two output levels:
a. 3,930 units.
b. 4,330 units.
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