exible budget variances Baird Manufacturing Company established the following standard price and cost data: Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost 5555 $ $ $ 8.50 per unit 3.90 per unit 2,100 total 900 total Baird planned to produce and sell 2,200 units. Actual production and sales amounted to 2,400 units. Assume that the actual sales price is $8.15 per unit and that the actual variable cost is $4.10 per unit. The actual fixed manufacturing cost is $1,800, and the actual selling and administrative costs are $925.
exible budget variances Baird Manufacturing Company established the following standard price and cost data: Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost 5555 $ $ $ 8.50 per unit 3.90 per unit 2,100 total 900 total Baird planned to produce and sell 2,200 units. Actual production and sales amounted to 2,400 units. Assume that the actual sales price is $8.15 per unit and that the actual variable cost is $4.10 per unit. The actual fixed manufacturing cost is $1,800, and the actual selling and administrative costs are $925.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Exercise 3 Determining flexible budget variances
Baird Manufacturing Company established the following standard price and cost data:
Sales price
Variable manufacturing cost
Fixed manufacturing cost
Fixed selling and administrative cost
SSSS
Baird planned to produce and sell 2,200 units. Actual production and sales amounted to 2,400 units.
Assume that the actual sales price is $8.15 per unit and that the actual variable cost is $4.10 per unit.
The actual fixed manufacturing cost is $1,800, and the actual selling and administrative costs are $925.
Sales
Variable manufacturing
Contribution margin.
Required
a.&b. Determine the flexible budget variances and classify the variances by selecting favorable (F)
or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)
F/U
Fixed manufacturing
Fixed selling and administrative cost
Net income (loss)
8.50 per unit
3.90 per unit
2,100 total
900 total
Amount
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