Brief Exercise 15-5 (Algo) Determining flexible budget variances LO 15-5 Mustang Manufacturing Company's standard and actual price and cost data follows. Standard 25,700 units Unit sales Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost Net income $220 per unit $140 per unit Flexible Budget Actual Results $376,000 $141,500 Required a. & b. Determine the flexible budget variances. Classify the variances as favorable or unfavorable. Note: Select "None" if there is no effect (i.e., zero variance). Actual 29,500 units $200 per unit $130 per unit $390,900 $124,000 Flexible Budget Variances Unfavorable
Brief Exercise 15-5 (Algo) Determining flexible budget variances LO 15-5 Mustang Manufacturing Company's standard and actual price and cost data follows. Standard 25,700 units Unit sales Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost Net income $220 per unit $140 per unit Flexible Budget Actual Results $376,000 $141,500 Required a. & b. Determine the flexible budget variances. Classify the variances as favorable or unfavorable. Note: Select "None" if there is no effect (i.e., zero variance). Actual 29,500 units $200 per unit $130 per unit $390,900 $124,000 Flexible Budget Variances Unfavorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Transcribed Image Text:Brief Exercise 15-5 (Algo) Determining flexible budget variances LO 15-5
Mustang Manufacturing Company's standard and actual price and cost data follows.
Standard
25,700 units
$220 per unit
$140 per unit
Unit sales
Sales price
Variable manufacturing cost
Fixed manufacturing cost
Fixed selling and administrative cost
Net income
$376,000
$141,500
Flexible Budget Actual Results
Required
a. & b. Determine the flexible budget variances. Classify the variances as favorable or unfavorable.
Note: Select "None" if there is no effect (i.e., zero variance).
Actual
29,500 units
$200 per unit
$130 per unit
Flexible Budget Variances
Unfavorable
$390,900
$124,000
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