Managers at Crane, Inc. were cautiously optimistic about receiving their bonuses at year-end. Periodic communications from the top noted that the sales team had been exceeding targets throughout the year, which led to steady production activity to keep pace. Managers knew that a company profit margin of 12% meant bonuses for everyone. The production crew had been managing costs well but wasn't sure where final costs would land with the sales volume higher than planned. The following information outlines actual and budgeted results for the year. Sales volume (units) Selling price DM cost/unit DL cost/unit Variable-MOH cost/unit Variable SG&A cost/unit Fixed-MOH cost Fixed SG&A cost Show Transcribed Text Sales Variable costs: Direct materials Direct labor Variable-MOH Variable SG&A Contribution margin Fixed costs: Fixed-MOH Fixed SG&A Operating income Actual $ 51,900 $14.60 $3.20 $1.65 $1.50 $189,000 $132,000 Determine the flexible budget variances and sales price variance, noting the amount and sign for each. $ $0.40 Master Budget 44,300 $14.20 $3.10 $1.70 $1.50 $0.40 $179,600 $127,100 736980 Flexible Budget Variance 160890 88230 77850 20760 389250 179600 3 127100 c 82550 Favorable Unfavorable Favorable Unfavorable Unfavorable Favorable Unfavorable Unfavorable Favorable
Managers at Crane, Inc. were cautiously optimistic about receiving their bonuses at year-end. Periodic communications from the top noted that the sales team had been exceeding targets throughout the year, which led to steady production activity to keep pace. Managers knew that a company profit margin of 12% meant bonuses for everyone. The production crew had been managing costs well but wasn't sure where final costs would land with the sales volume higher than planned. The following information outlines actual and budgeted results for the year. Sales volume (units) Selling price DM cost/unit DL cost/unit Variable-MOH cost/unit Variable SG&A cost/unit Fixed-MOH cost Fixed SG&A cost Show Transcribed Text Sales Variable costs: Direct materials Direct labor Variable-MOH Variable SG&A Contribution margin Fixed costs: Fixed-MOH Fixed SG&A Operating income Actual $ 51,900 $14.60 $3.20 $1.65 $1.50 $189,000 $132,000 Determine the flexible budget variances and sales price variance, noting the amount and sign for each. $ $0.40 Master Budget 44,300 $14.20 $3.10 $1.70 $1.50 $0.40 $179,600 $127,100 736980 Flexible Budget Variance 160890 88230 77850 20760 389250 179600 3 127100 c 82550 Favorable Unfavorable Favorable Unfavorable Unfavorable Favorable Unfavorable Unfavorable Favorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Managers at Crane, Inc. were cautiously optimistic about receiving their bonuses at year-end. Periodic communications from the top
noted that the sales team had been exceeding targets throughout the year, which led to steady production activity to keep pace.
Managers knew that a company profit margin of 12% meant bonuses for everyone. The production crew had been managing costs well
but wasn't sure where final costs would land with the sales volume higher than planned. The following information outlines actual and
budgeted results for the year.
Sales volume (units)
Selling price
DM cost/unit
DL cost/unit
Variable-MOH cost/unit
Variable SG&A cost/unit
Fixed-MOH cost
Fixed SG&A cost
Show Transcribed Text
Sales
Variable costs:
Direct materials
Direct labor
Variable-MOH
Variable SG&A
Determine the flexible budget variances and sales price variance, noting the amount and sign for each.
Contribution margin
Fixed costs:
Fixed-MOH
Fixed SG&A
Operating income
Actual
51,900
$14.60
$3.20
$1.65
$1.50
$0.40
$189,000
$132,000
$
Master Budget
44,300
$14.20
$3.10
$1.70
$1.50
$0.40
$179,600
$127,100
Flexible Budget Variance
736980
OOOOO DOD
160890
88230
77850
20760
389250
179600
127100
82550
Favorable
Unfavorable
Favorable
Unfavorable
Unfavorable
Favorable
Unfavorable
Unfavorable
Favorable
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