Home Insert Page Layout Formulas Data Review View A B D Performance Report, Year Ended December 31, 2017 Flexible-Budget Flexible Budget Sales-Volume Static Budget 120,000 3 Actual Results Variances Variances 4 Units sold 5 Revenues (sales) 6 Variable costs 7 Contribution margin 8 Fixed costs 9 Operating income 130,000 $715,000 515,000 200,000 140,000 $ 60,000 $420,000 240,000 180,000 120,000 $ 60,000 1. Calculate all the required variances. (If your work is accurate, you will find that the total static-budget variance is $0.) 2. What are the actual and budgeted selling prices? What are the actual and budgeted variable costs per unit? 3. Review the variances you have calculated and discuss possible causes and potential problems. What is the important lesson learned here? Required
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.
Flexible budget, working backward. The Clarkson Company produces engine parts for car manufacturers. A new accountant intern at Clarkson has accidentally deleted the company’s
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