Majestic Company manufactures TVs. Some of the company’s data was misplaced. Use the following information to replace the lost data: actual resultsFlexible variancesFlexible budgetSales-volume variancesStatic budgetunits sold112,500 112,500 103,125revenues$42,800$1,000 F(A)$1,400 U(B)variable costs(C)$200 U$15,860$2,340 F$18,200fixed cost$8,280$860 F$9,140 $9,140operating income$17,740(D)$16,080(E)$15,140 What are the respective flexible-budget revenues (A)?What are the static-budget revenues (B)?What are the actual variable costs (C) ?What is the total flexible-budget variance (D)?What is the total sales-volume variance (E)?What is the total static-budget variance?

Introduction:- Standard costs are estimates of the actual costs in a company’s production process…

Answered: Majestic Company manufactures TVs. Some…

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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Majestic Company manufactures TVs. Some of the company’s data was misplaced. Use the following information to replace the lost data:

	actual results	Flexible variances	Flexible budget	Sales-volume variances	Static budget
units sold	112,500		112,500		103,125
revenues	$42,800	$1,000 F	(A)	$1,400 U	(B)
variable costs	(C)	$200 U	$15,860	$2,340 F	$18,200
fixed cost	$8,280	$860 F	$9,140		$9,140
operating income	$17,740	(D)	$16,080	(E)	$15,140

What are the respective flexible-budget revenues (A)?
What are the static-budget revenues (B)?
What are the actual variable costs (C) ?
What is the total flexible-budget variance (D)?
What is the total sales-volume variance (E)?
What is the total static-budget variance?

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

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