Calculate Beam Draperies' flexible-budget and sales-volume variances for (a) revenues, (b) variable costs, (c) fixed costs, and (d) operating income.
Calculate Beam Draperies' flexible-budget and sales-volume variances for (a) revenues, (b) variable costs, (c) fixed costs, and (d) operating income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:Beam Draperies makes and sells curtains. Information related to its performance in 2020 is given below:
(Click the icon to view the partially completed performance report.)
(Click the icon to view the information.)
Calculate Beam Draperies' flexible-budget and sales-volume variances for (a) revenues, (b) variable costs, (c) fixed costs, and (d) operating income.
Begin with the flexible-budget variance column, then the sales-volume variance column. Label each variance as favorable (F) or unfavorable (U). (For variances with a $0 balance, make sure to enter "0" in the appropriate
field. If the variance is zero, do not select a label.)
Units sold
Revenues (sales) $
Variable costs
Contribution margin
Fixed costs
Operating income
$
Actual
Results
1,560
273.000
164,000
109,000
74.000
35,000
Data table
Units made and sold
Selling price
Variable costs
Fixed costs
Flexible-Budget
Variance
$
$
Print
Actual
$
$
1,560
$175 per curtain
164,000
74,000 S
Done
Flexible
Budget
1,560
285,480
168,480
117,000
70,000
47,000
Budgeted
Sales-Volume
Variance
- X
1,460
$183 per curtain
$108 per curtain
70,000
00000
$
$
Static
Budget
1,460
267,180
157,680
109,500
70,000
39,500
Reference
Actual
Results
1,560
Units sold
Revenues (sales) S 273,000
Variable costs
164,000
Contribution margin
Fixed costs
Operating income
$
109,000
74,000
35,000
Flexible-Budget Flexible Sales-Volume
Variances Budget Variances
1,560
Print
$ 285,480
168,480
117,000
70,000
$ 47,000
Done
Static
Budget
- X
1,460
$ 267,180
157,680
109,500
70,000
$ 39,500
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