Fanning Manufacturing Company set its standard variable manufacturing cost at $26 per unit of product. The company planned to make and sell 4,500 units of product during Year 3. More specifically, the master budget called for total variable manufacturing cost to be $117,000. Actual production during Year 3 was 4,700 units, and actual variable manufacturing costs amounted to $123,040. The production supervisor was asked to explain the variance between budgeted and actual cost ($123,040-$117,000-$6,040). The supervisor responded that she was not responsible for the variance that was caused solely by the increase in sales volume controlled by the marketing department. Required a. Determine the flexible budget variance and indicate the effect of the variance by selecting favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). b. Do you agree with the production supervisor? a. Flexible budget variance b. Do you agree with the production supervisor?

Fanning Manufacturing Company set its standard variable manufacturing cost at $26 per unit of product. The company planned to make and sell 4,500 units of product during Year 3. More specifically, the master budget called for total variable manufacturing cost to be $117,000. Actual production during Year 3 was 4,700 units, and actual variable manufacturing costs amounted to $123,040. The production supervisor was asked to explain the variance between budgeted and actual cost ($123,040-$117,000-$6,040). The supervisor responded that she was not responsible for the variance that was caused solely by the increase in sales volume controlled by the marketing department. Required a. Determine the flexible budget variance and indicate the effect of the variance by selecting favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). b. Do you agree with the production supervisor? a. Flexible budget variance b. Do you agree with the production supervisor?

Name: Fanning Manufacturing Company set its standard variable manufacturing
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Description: Fanning Manufacturing Company set its standard variable manufacturing cost at $26 per unit of product. The company planned tomake and sell 4,500 units of product during Year 3. More specifically, the master budget called for total variable manufactu

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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