Bank Management Printers, Inc., produces luxury check- books with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September 2017 included these data: 15,000 Number of checkbooks Selling price per book Variable cost per book 20 Fixed costs for the month $145,000 The actual results for September 2017 were as follows: Number of checkbooks produced and sold Average selling price per book Variable cost per book 12,000 $ 21 $150,000 Fixed costs for the month The executive vice president of the company observed that the operating income for September 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 management accountant, you have been asked to provide explanations for the disappointing September results. Bank Management 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.
Bank Management Printers, Inc., produces luxury check- books with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September 2017 included these data: 15,000 Number of checkbooks Selling price per book Variable cost per book 20 Fixed costs for the month $145,000 The actual results for September 2017 were as follows: Number of checkbooks produced and sold Average selling price per book Variable cost per book 12,000 $ 21 $150,000 Fixed costs for the month The executive vice president of the company observed that the operating income for September 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 management accountant, you have been asked to provide explanations for the disappointing September results. Bank Management 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.
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Q.Prepare a flexible-
Transcribed Image Text:Bank Management Printers, Inc., produces luxury check-
books with three checks and stubs per page. Each checkbook is designed for an individual customer and is
ordered through the customer's bank. The company's operating budget for September 2017 included these data:
15,000
Number of checkbooks
Selling price per book
Variable cost per book
20
Fixed costs for the month
$145,000
The actual results for September 2017 were as follows:
Number of checkbooks produced and sold
Average selling price per book
Variable cost per book
12,000
$ 21
$150,000
Fixed costs for the month
The executive vice president of the company observed that the operating income for September 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 management accountant, you have been asked to provide explanations for
the disappointing September results.
Bank Management 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.
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