part 4 5 6 Question 2.1 TeleTube Inc. manufacturers TVs. Unfortunately, some of the company's data was misplaced by an IT error. Use the following information to replace the lost data: Analysis Actual Results Flexible Variances Flexible Budget Sales- Volume Variances Static Budget Units Sold 112,500 112,500 103,125 Revenues $42,080 $1,000 F (A) $1,400 U (B) Variable Costs (C) $200 U $15,860 $2,340 F $18,200 Fixed Costs $8,280 $860 F $9,140 $9,140 Operating Income $17,740 (D) $16,080 (E) $15,140 Required 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?
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.
part 4 5 6
Question 2.1
TeleTube Inc. manufacturers TVs. Unfortunately, some of the company's data was misplaced by an IT error. Use the following information to replace the lost data:
|
Analysis |
Actual Results |
Flexible Variances |
Flexible Budget |
Sales- Volume Variances |
Static Budget |
|
Units Sold |
112,500 |
|
112,500 |
|
103,125 |
|
Revenues |
$42,080 |
$1,000 F |
(A) |
$1,400 U |
(B) |
|
Variable Costs |
(C) |
$200 U |
$15,860 |
$2,340 F |
$18,200 |
|
Fixed Costs |
$8,280 |
$860 F |
$9,140 |
|
$9,140 |
|
Operating Income |
$17,740 |
(D) |
$16,080 |
(E) |
$15,140 |
Required
- 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?
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