Determine the static budget and use the information to prepare a flexible budget and analysis for the actually sold. If no effect, select "No Effect" and leave the amount boxes blank. For those boxes in which you must nter negative numbers use a minus sign. (Example: -300).

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Titanium Blades refines titanium for use in all brands of razor blades. It prepared a static budget for the sales of
5,500 units. The following variances were observed:
Units
Sales
Variable Expenses
Fixed Expenses
Net Income (loss)
Units
Sales
Determine the static budget and use the information to prepare a flexible budget and analysis for the 6,500 units
actually sold. If no effect, select "No Effect" and leave the amount boxes blank. For those boxes in which you must
nter negative numbers use a minus sign. (Example: -300).
>
Static budget
Flexible budget
Variable Expenses
Fixed Expenses
Actual Results
Net Income (Loss)
$175,500
$27,000 Favorable
77,800 11,800 Unfavorable
93,800
300 Unfavorable
$3,900 $14,900 Unfavorable
LA
5,500 ✔
$ 148,500✔
66,000 X
Variances
93,500 X
-11,000 ✓
6,500
$ 175,500 ✓
$
11,800 X
93,500 X
4,000
Actual Results
$ 175,500✔
LA
93,800 X
93,800 X
3,900 ✔
$
tA
LA
0
Variances
✓ No Effect
200✔ Favorable
300 X Unfavora
100 X Unfavora
Transcribed Image Text:Titanium Blades refines titanium for use in all brands of razor blades. It prepared a static budget for the sales of 5,500 units. The following variances were observed: Units Sales Variable Expenses Fixed Expenses Net Income (loss) Units Sales Determine the static budget and use the information to prepare a flexible budget and analysis for the 6,500 units actually sold. If no effect, select "No Effect" and leave the amount boxes blank. For those boxes in which you must nter negative numbers use a minus sign. (Example: -300). > Static budget Flexible budget Variable Expenses Fixed Expenses Actual Results Net Income (Loss) $175,500 $27,000 Favorable 77,800 11,800 Unfavorable 93,800 300 Unfavorable $3,900 $14,900 Unfavorable LA 5,500 ✔ $ 148,500✔ 66,000 X Variances 93,500 X -11,000 ✓ 6,500 $ 175,500 ✓ $ 11,800 X 93,500 X 4,000 Actual Results $ 175,500✔ LA 93,800 X 93,800 X 3,900 ✔ $ tA LA 0 Variances ✓ No Effect 200✔ Favorable 300 X Unfavora 100 X Unfavora
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