Flexible Budgets; Total Operating Income Variance; Breakdown of the Total OperatingIncome Variance; Spreadsheet Application The following information is available forBrownstone Products Company for the month of July:Actual Master BudgetUnits 3,800 4,000 Sales revenue $53,200 $60,000 Variable manufacturing costs 19,000 16,000 Fixed manufacturing costs 16,000 15,000 Variable selling and administrative expenses 7,700 8,000 Fixed selling and administrative expenses 10,000 9,000 Required1. What was the total operating income variance for July, rounded to the nearest whole dollar? (Note: Thisvariance is also called the master (static) budget variance for the period.) Was this variance favorable (F)or unfavorable (U)?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Flexible Budgets; Total Operating Income Variance; Breakdown of the Total Operating
Income Variance; Spreadsheet Application The following information is available for
Brownstone Products Company for the month of July:
Actual Master Budget
Units 3,800 4,000
Sales revenue $53,200 $60,000
Variable
Fixed manufacturing costs 16,000 15,000
Variable selling and administrative expenses 7,700 8,000
Fixed selling and administrative expenses 10,000 9,000
Required
1. What was the total operating income variance for July, rounded to the nearest whole dollar? (Note: This
variance is also called the
or unfavorable (U)?
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