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Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales revenue, $391,000; variable costs, $259,500; fixed costs, $101,900. Actual results for the year were as follows: sales revenue, $369,500; variable costs, $226,900; fixed costs, $98,800. The flexible-budget operating income for the year was $36,900. a. What is the total master (static) budget variance in operating profit for the period? b. What portion of the total master (static) budget variance is attributable to actual sales volume being different from planned sales volume? c. What portion of the total variance is due to a combination of selling price and costs (variable cost per unit and total fixed costs) being different from budgeted amounts? a. Total master (static) budget variance b. Sales volume variance c. Flexible-budget variance

Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales revenue, $391,000; variable costs, $259,500; fixed costs, $101,900. Actual results for the year were as follows: sales revenue, $369,500; variable costs, $226,900; fixed costs, $98,800. The flexible-budget operating income for the year was $36,900. a. What is the total master (static) budget variance in operating profit for the period? b. What portion of the total master (static) budget variance is attributable to actual sales volume being different from planned sales volume? c. What portion of the total variance is due to a combination of selling price and costs (variable cost per unit and total fixed costs) being different from budgeted amounts? a. Total master (static) budget variance b. Sales volume variance c. Flexible-budget variance

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales revenue, $391, 000; variable costs, $259, 500; fixed costs, $101,900. Actual results for the year were as follows: sales revenue, $369, 500; variable costs, $226, 900; fixed costs, $98,800. The flexible - budget operating income for the year was $ 36,900. a. What is the total master (static) budget variance in operating profit for the period? b. What portion of the total master (static) budget variance is attributable to actual sales volume being different from planned sales volume? c. What portion of the total variance is due to a combination of selling price and costs (variable cost per unit and total fixed costs) being different from budgeted amounts?
Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales revenue, $391,000; variable costs, $259,500; fixed costs, $101,900. Actual results for the year were as follows: sales revenue, $369,500; variable costs, $226,900; fixed costs, $98,800. The flexible-budget operating income for the year was $36,900. a. What is the total master (static) budget variance in operating profit for the period? b. What portion of the total master (static) budget variance is attributable to actual sales volume being different from planned sales volume? c. What portion of the total variance is due to a combination of selling price and costs (variable cost per unit and total fixed costs) being different from budgeted amounts? a. Total master (static) budget variance b. Sales volume variance c. Flexible-budget variance
Transcribed Image Text:Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales revenue, $391,000; variable costs, $259,500; fixed costs, $101,900. Actual results for the year were as follows: sales revenue, $369,500; variable costs, $226,900; fixed costs, $98,800. The flexible-budget operating income for the year was $36,900. a. What is the total master (static) budget variance in operating profit for the period? b. What portion of the total master (static) budget variance is attributable to actual sales volume being different from planned sales volume? c. What portion of the total variance is due to a combination of selling price and costs (variable cost per unit and total fixed costs) being different from budgeted amounts? a. Total master (static) budget variance b. Sales volume variance c. Flexible-budget variance
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