Data Table Requirements Performance Report, June 2017 1. Calculate the static-budget variance in units, revenues, variable manufacturing costs, and contribution margin. What percentage is each static-budget variance relative to its static-budget amount? 2. Break down each static-budget variance into a flexible-budget variance and a sales-volume variance. Actual Static Results 490,000 Budget 479,000 Units (pounds) Revenues 2,616,600 S 2,586,600 3. Calculate the selling-price variance. Variable manufacturing costs 1,646,400 1,580,700 4. Assume the role of management accountant at Chiffon. How would you present the results to John Gosher? Should he be more concerned? If so, why? Contribution margin 970,200 S 1,005,900 John Gosher, the business manager for ice-cream products, is pleased that more pounds of ice cream were sold than budgeted and that revenues were up. Unfortunately, variable manufacturing costs went up, too. The bottom line is that contribution margin declined by $35,700, which is just over 1% of the budgeted revenues of $2,586,600. Overall, Gosher feels that the business is running fine. Print Done
Data Table Requirements Performance Report, June 2017 1. Calculate the static-budget variance in units, revenues, variable manufacturing costs, and contribution margin. What percentage is each static-budget variance relative to its static-budget amount? 2. Break down each static-budget variance into a flexible-budget variance and a sales-volume variance. Actual Static Results 490,000 Budget 479,000 Units (pounds) Revenues 2,616,600 S 2,586,600 3. Calculate the selling-price variance. Variable manufacturing costs 1,646,400 1,580,700 4. Assume the role of management accountant at Chiffon. How would you present the results to John Gosher? Should he be more concerned? If so, why? Contribution margin 970,200 S 1,005,900 John Gosher, the business manager for ice-cream products, is pleased that more pounds of ice cream were sold than budgeted and that revenues were up. Unfortunately, variable manufacturing costs went up, too. The bottom line is that contribution margin declined by $35,700, which is just over 1% of the budgeted revenues of $2,586,600. Overall, Gosher feels that the business is running fine. Print Done
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Chiffon, Inc. produces the basic fillings used in many popular frozen desserts and treats-vanilla and chocolate ice creams, puddings, meringues, and fudge. Chiffon uses standard costing and carries over no inventory from one month to the next. The
ice-cream product group's results for June 2017 were as follows:
E (Click the icon to view the results.)
Read the requirements
Requirements 1 and 2. Calculate the static-budget variance in units, revenues, variable manufacturing costs, and contribution margin. What percentage is each static-budget variance relative to its static-budget amount? Break down each static-budget
variance into a flexible-budget variance and a sales-volume variance.
Begin with the flexible budget columns, then enter in the sales volume variance and static budget variances. Finally, compute the static budget variance as a percentage of the static budget. Label each variance as favorable (F) or unfavorable (U). (For
variances with a S0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Round dollar amounts to the nearest whole dollar and percentages to two decimal places, XXX%.)
Flexible-
Data Table
Actual
Budget
Flexible
Requirements
Results
Variances
Budget
Units (pounds)
Performance Report, June 2017
Revenues
1. Calculate the static-budget variance in units, revenues, variable
manufacturing costs, and contribution margin. What percentage is each
static-budget variance relative to its static-budget amount?
2. Break down each static-budget variance into a flexible-budget variance and a
sales-volume variance.
3. Calculate the selling-price variance.
4. Assume the role of management accountant at Chiffon. How would you
present the results to John Gosher? Should he be more concerned? If so,
why?
Actual
Static
Variable mfg. costs
Results
Budget
Contribution margin
Units (pounds)
490,000
479,000
Revenues
2,616,600 $
2,586,600
Variable manufacturing costs
1,646,400
1,580,700
Contribution margin
970,200 S
1,005,900
John Gosher, the business manager for ice-cream products, is pleased that more
pounds of ice cream were sold than budgeted and that revenues were up.
Unfortunately, variable manufacturing costs went up, too. The bottom line is that
contribution margin declined by $35,700, which is just over 1% of the budgeted
revenues of $2,586,600. OverallI, Gosher feels that the business is running fine.
Print
Done
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