Jay Banning, CEO and a major stockholder of Banning Incorporated, was unhappy with its operating results for the past year. The company manufactures two environmentally friendly industrial caliber cleaning machines used primarily in automobile repair shops, gas stations, and auto dealerships. The master budget and operating results for the year (000s omitted except for the selling price per unit) follow: Actual Budget T10 T10 $ 133,200 61,800 $ 71,400 10,000 $ 61,400 S40 S40 $ 58,734 27,000 $ 31,734 10,000 $ 106,000 50,000 $ 56,000 10,000 $ 46,000 $ 46,000 25,000 $ 21,000 10,000 $ 11,000 Sales Variable cost Contribution Fixed cost Operating income $ 21,734 Units sold 1,200 1,506 Unit selling price $ 100 $ 40 Required: 1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and contribution margin sales mix variance for each product and for the firm. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.)

Jay Banning, CEO and a major stockholder of Banning Incorporated, was unhappy with its operating results for the past year. The company manufactures two environmentally friendly industrial caliber cleaning machines used primarily in automobile repair shops, gas stations, and auto dealerships. The master budget and operating results for the year (000s omitted except for the selling price per unit) follow: Actual Budget T10 T10 $ 133,200 61,800 $ 71,400 10,000 $ 61,400 S40 S40 $ 58,734 27,000 $ 31,734 10,000 $ 106,000 50,000 $ 56,000 10,000 $ 46,000 $ 46,000 25,000 $ 21,000 10,000 $ 11,000 Sales Variable cost Contribution Fixed cost Operating income $ 21,734 Units sold 1,200 1,506 Unit selling price $ 100 $ 40 Required: 1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and contribution margin sales mix variance for each product and for the firm. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.)

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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Jay Banning, CEO and a major stockholder of Banning Incorporated, was unhappy with its operating results for the past year. The company manufactures two environmentally friendly industrial caliber cleaning machines used primarily in automobile repair shops, gas stations, and auto dealerships. The master budget and operating results for the year (000s omitted except for the selling price per unit) follow: Actual Budget T10 S40 T10 S40 $ 142,800 61,400 $ 81,400 10,000 $ 59,046 18,600 $ 40,446 10,000 $ 30,446 $ 114,000 50,000 $ 54,000 25,000 Sales Variable cost Contribution $ 64,000 29,000 10,000 Fixed cost 10,000 Operating income $ 71,400 $ 54,000 $ 19,000 Units sold 1,200 1,514 Unit selling price $ 100 $ 40 Required: 1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and contribution margin sales mix variance for each product and for the firm. (Do not round intermediate calculations and…
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