Part B is needed Marla Baldwin was a bit anxious as she created the year-end performance reports. She remembered how management had hoped theeconomy would make a favorable turn, taking pressure off consumers so they'd feel more comfortable spending on the company'ssplurge Item-a luxurious hooded cotton robe. Alas, actual production and sales ended at 5,100 units, a whopping 1,000 units shy ofthe company's original budget. The following Information presents the company's actual Income statement and other key Informationfor Marla.SalesActual IncomeVarlable costs:DMDLVarlable-MOHContribution marginFixed costs:Fixed-MOHFixed SG&AOperating IncomeStandards are as follows.Direct materialsDirect laborVarlable-MOHFixed-MOH$800,700172,125 (for 11,475 yards purchased and used)75,276(for 3,672 hours used)45,900Selling priceFixed SG&A expense507,399170,978243,100$93,321Standard Quantity per Unit2.30 yards0.70 DL hours2.30 yards2.30 yardsAdditional master budget Information:$175$288,600Standard Price$16.00 per yard$21.00 per DL hour$5.00 per yard$13.00 per yard Present the company's complete flexible budget for the year and compare it to the actual results to determine flexible budgetvarlances for each line Item; Include the amount and sign for all variances.Flexible Budget VarlancesSalesLess:Variablecosts:DirectmaterialsDirect laborVariable-MOHContributionmarginLess: FixedcostsFixed-MOHSG&AOperatingIncome(b1)$800,700 $ActualDM price varlance172,12575,276$507,399Expected DM use45,900170,978243,100$93,321 $$$DM efficiency varlance $91,80015,55530612,75063,80111,41245,5006,889UnfavorableFavorableUnfavorableyardsFavorableUnfavorableFavorableBreak down the DM flexible budget varlance Into the price and efficiency varlances. How many yards of DM did the companyexpect it would use for actual production?FavorableUnfavorableFavorableFavorable$Flexible E

The question is asked about the DM flexible variances. We need to solve only part B of those…

Present the company's complete flexible budget for the year and compare it to the actual results to determine flexible budget varlances for each line Item; Include the amount and sign for all varlances. Flexible Budget Varlances Sales Less: Variable costs: Direct materials Direct labor Variable- MOH Contribution margin Less: Fixed costs Fixed-MOH SG&A Operating Income (b1) Actual $800,700 $ 172,125 Expected DM use 75,276 45.900 $507,399 170,978 243,100 $93,321 DM price varlance DM efficiency varlance $ $ 91,800 15,555 306 12,750 63,901 11,412 45,500 6,889 Unfavorable Favorable Unfavorable yards Favorable Unfavorable Favorable Favorable Unfavorable Break down the DM flexible budget varlance Into the price and efficiency varlances. How many yards of DM did the company expect it would use for actual production? Favorable Favorable $ Flexible E

Present the company's complete flexible budget for the year and compare it to the actual results to determine flexible budget varlances for each line Item; Include the amount and sign for all varlances. Flexible Budget Varlances Sales Less: Variable costs: Direct materials Direct labor Variable- MOH Contribution margin Less: Fixed costs Fixed-MOH SG&A Operating Income (b1) Actual $800,700 $ 172,125 Expected DM use 75,276 45.900 $507,399 170,978 243,100 $93,321 DM price varlance DM efficiency varlance $ $ 91,800 15,555 306 12,750 63,901 11,412 45,500 6,889 Unfavorable Favorable Unfavorable yards Favorable Unfavorable Favorable Favorable Unfavorable Break down the DM flexible budget varlance Into the price and efficiency varlances. How many yards of DM did the company expect it would use for actual production? Favorable Favorable $ Flexible E

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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