Exercise 16-28 (Static) Profit Varlance Analysis (LO 16-4) The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,000 units with revenues of $3,300,000 Total variable costs were budgeted at $1.925,000 and fixed costs at $950.000. During the period, actual production and actual sales were 255,000 units. The actual revenues were $3,442,500. Actual variable costs were $6.50 per unit. Actual fixed costs were $980,000 Required: Prepare a profit variance analysis. Note: 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. Sales revenue Less Variable costs Contribution margin Less Fixed costs Operating profits Actual Cherrylawn Corporation Profit Värlance Analysis Manufacturing Variances Sales Price Variance Flexible Budget Sales Activity Variance Master Budget

Exercise 16-28 (Static) Profit Varlance Analysis (LO 16-4) The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,000 units with revenues of $3,300,000 Total variable costs were budgeted at $1.925,000 and fixed costs at $950.000. During the period, actual production and actual sales were 255,000 units. The actual revenues were $3,442,500. Actual variable costs were $6.50 per unit. Actual fixed costs were $980,000 Required: Prepare a profit variance analysis. Note: 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. Sales revenue Less Variable costs Contribution margin Less Fixed costs Operating profits Actual Cherrylawn Corporation Profit Värlance Analysis Manufacturing Variances Sales Price Variance Flexible Budget Sales Activity Variance Master Budget

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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Sales price $91 Direct material per unit 31 Direct labor per unit 16 Variable manufacturing overhead per unit 13 Fixed manufacturing overhead per unit 77,000 Variable sales and admin expenses per unit 4 Fixed sales and admin expenses per unit 24,000 Taxes 30%* *of income before taxes Prepare a flexible budgeted income for 100,000 units using the above information from a static budget for 80,000 units: Flexible Budgeted Income Statement $- Select - Cost of Goods Sold - Select - - Select - - Select - - Select - $- Select - $- Select - - Select - - Select - $- Select - - Select - $- Select -
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Performance Report Based on Budgeted and Actual Levelsof ProductionBowling Company budgeted the following amounts:Variable costs of production:Direct materials 3 pounds @ $0.60 per poundDirect labor 0.5 hr. @ $16.00 per hourVOH 0.5 hr. @ $2.20FOH:Materials handling $6,200Depreciation $2,600 At the end of the year, Bowling had the following actual costs for production of 3,800 units:Direct materials $ 6,800Direct labor 30,500VOH 4,200FOH:Materials handling 6,300Depreciation 2,600Required:1. Calculate the budgeted amounts for each cost category listed above for the 4,000budgeted units.2. Prepare a performance report using a budget based on expected production of 4,000units.3. Prepare a performance report using a budget based on the actual level of production of3,800 units.
QUESTION 2 2.1 REQUIRED Use the information provided below to prepare the performance report for Lonmin Limited. INFORMATION Lonmin Ltd manufactures a single product. It originally planned to produce and sell 18 000 units during the year but the actual activity level was 22 000 units. The budgeted and actual income and cost for the year are as follows: Original Budget Actual results Volume 18 000 units 22 000 units R Sales 2 520 000 3 300 000 Cost of sales (1 670 000) (2 132 000) Direct Materials 720 000 924 000 Direct labour 450 000 594 000 Variable overheads 180 000 264 000 Fixed overheads 320 000 350 000 Gross Profit 850 000 1 168 000
Mirabel Manufacturing Budgeted Income Statement For the Year Ending December 31 Sales Cost of goods sold: Gross Margin Selling & Administrative Net Operating Income Normal Annual Sales Volume Unit Selling Price Variable expense per unit Variable Fixed Commissions Fixed Marketing Expenses Fixed Administrative Model 101 16,000 $ 650 $250 (Note: Each of the following questions is independent of the others) 1. What is Mirabel's over-all break-even point in sales dollars? $ 13,300,000 $ 9,300,000 $ 4,410,000 $ 1,350,000 $ 6,000,000 $ 2,390,000 Model 201 19,000 $750 $ 200 $ 36,750,000 $ 14,150,000 Model 301 11,000 $ 1,100 $ 500
PROBLEM 10 The controller of Palma Company is examining the following budgeted and actual income statements for its principal product for 2021. All amounts are in thousands of pesos. Budget P4,800.0 1,668.0 P3,120.0 Actual P4,967.2 1,780.8 P3,186.4 Sales Variable cost Contribution margin The budgeted unit selling price is P8.00. Actual unit volume is 6% over budget, but the actual selling price is below budget. Per-unit variable costs are incurred as budgeted. Determine the sales price variance and sales volume variance.
QUESTION 1 A company manufactures and sells a single product. Budgeted data per unit of the product is: (20 Marks) Selling Price Variable Cost* Fixed Production overhead R 8.50 3.70 2.90 *All variable costs are manufacturing i.e there are no non-manufacturing variable costs. The above fixed production overhead absorption rate is based on budgeted production of 12,000 units per period. Budgeted non-production overhead (all fixed) is R16, 800 per period. Actual sales and production for two periods has been: Sales Production Period 1 11 600 units 12 000 units Period 2 12 400 units 12 300 units There was no stock at the start of Period 1. The selling price, unit variable costs and total fixed costs were as per budget in both periods. REQUIRED 1.1 Prepare statements of Comprehensive income for both periods (ie period 1 & Period 2), using absorption costing, showing the actual results for each of the two periods. (7) The company wishes to compare the results reported in (1.1) above with…
3. Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and management needs to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales. Sales $3,500,000 Cost of goods sold Direct material 900,000 Direct labor 1,000,000 Variable manufacturing overhead Fixed manufacturing overhead Cost of goods sold Gross profit Variable sales and administration expenses Fixed sales and administration expenses 250,000 80,000 2,230,000 1,270,000 100,000 950,000 Income before taxes 220,000 Таxes 66,000 Net income $ 154,000
QUESTION 4 Millenium Bhd is a manufacturing company which produces one type of product, Z3. The current year's budget based on the production and sales of 40,000 units of Z3 shows the following data: RM Total variable costs 2,520,000 Fixed overhead costs: Production 2,900,000 Administrative 500,000 Selling and distribution 578,000 Total contribution 4,680,000 The manager is not satisfied with the current sales and budgeted annual profit. He wishes to have a minimum annual profit of RM1,000,000. He suggests that the product should be advertised on television which will incur additional cost of RM50,000. He also proposes to hire a consultant and the annual fee is RM252,000. As a result of these sales volume will increase by 32%. The variable cost per unit will remain unchanged. Required: a. Using the current budgeted data only, calculate: i) the annual profit ii) the selling price per unit iii) the break-even point in units b. Based on the manager's suggestions, calculate: i) the new…
View Policies Current Attempt in Progress Avalon, Inc's static budget shows $40,500 budgeted for direct materials, $54,000 budgeted for direct labor, and $13,500 budgeted for overhead. Avalon's actual direct materials were $42,000, actual direct labor was $51,000, and actual overhead was $13,800. What is the total difference between the static budget and actual, and is the difference favorable or unfavorable? O $4,800, unfavorable O $1,200, favorable O $1,200, unfavorable O $4,800, favorable Save for Later Attempts: 0 of 1 used Submit Answer
Q3 Hollaway Corporation has the following data for the current fiscal year: Actual Budget Sales Units Product X 25,000 94,000 Product Y 135,000 107,000 Total 160,000 201,000 Contribution Margin Product X $ 15.00 $ 14.00 Product Y $ 12.00 $ 11.00 The total sales mix variance for both products is: (Round your percentages to one decimal place. Example: Round .1447 to .145 or 14.5%.) Multiple Choice $409,760 unfavorable. $133,760 favorable. $253,760 favorable. $153,760 favorable. $149,760 unfavorable.
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