Classics, Ltd., details cars. Classics wants to compare this quarter’s results with those for last quarter, which is believed to be typical for operations. Assume that the following information is provided. Last Quarter This QuarterNumber of detailings 440 523Revenues$72,160$68,800Variable costs 27,920 31,920Contribution margin$44,240$36,880 Required:a. Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as “actual.”)b. What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.’s contribution margin? equired:Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the masterudget and this quarter as "actual.")What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.'s contributionargin?Complete this question by entering your answers in the tabs below.Required ARequired BCompute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as"actual.") (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, donot select either option. Enter your answers rounded to the nearest whole number.)Variable CostVarianceActualSales Price VarianceFlexibleMasterSales Activity VarianceBudgetBudgetSales revenue68,800Less:Variable Costs31,920FContribution marginRequired B >< Prev4 of 5Next >ce道%24

Part (a) Statement Showing Profit Variance Analysis Actual (523units) VariableCost Variance…

Answered: Classics, Ltd., details cars. Classics…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Classics, Ltd., details cars. Classics wants to compare this quarter’s results with those for last quarter, which is believed to be typical for operations. Assume that the following information is provided.

		Last Quarter		This Quarter
Number of detailings		440		523
Revenues	$	72,160	$	68,800
Variable costs		27,920		31,920
Contribution margin	$	44,240	$	36,880

Required:

a. Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as “actual.”)

b. What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.’s contribution margin?

equired:
Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master
udget and this quarter as "actual.")
What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.'s contribution
argin?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as
"actual.") (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do
not select either option. Enter your answers rounded to the nearest whole number.)
Variable Cost
Variance
Actual
Sales Price Variance
Flexible
Master
Sales Activity Variance
Budget
Budget
Sales revenue
68,800
Less:
Variable Costs
31,920
F
Contribution margin
Required B >
< Prev
4 of 5
Next >
ce
道
%24

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