Problem 15-20A (Algo) Determining sales and variable cost volume variances LO 15-2, 15-3, 15-4 Campbell Publications established the following standard price and costs for a hardcover picture book that th produces. Standard price and variable costs Sales price Materials cost Labor cost $36.50 8.90 3.60
Problem 15-20A (Algo) Determining sales and variable cost volume variances LO 15-2, 15-3, 15-4 Campbell Publications established the following standard price and costs for a hardcover picture book that th produces. Standard price and variable costs Sales price Materials cost Labor cost $36.50 8.90 3.60
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Problem 15-20A (Algo) Determining sales and variable cost volume variances LO 15-2, 15-3, 15-4
Campbell Publications established the following standard price and costs for a hardcover picture book that the company
produces.
Standard price and variable costs
Sales price
Materials cost
Labor cost
Overhead cost
Selling, general, and administrative costs
Planned fixed costs
Manufacturing overhead
Selling, general, and administrative
Number of units
Variable manufacturing costs
$36.50
Fixed costs
8.90
3.60
6.30
Campbell planned to make and sell 40,000 copies of the book.
Required:
a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income
statements, assuming production volumes of 39,000 and 41,000 units. Determine the sales and variable cost volume
variances, assuming volume is actually 41,000 units. Indicate whether the variances are favorable (F) or unfavorable (U).
(Select "None" if there is no effect (i.e., zero variance).)
6.40
$ 133,000
47,000
Master Budget Flexible Budgets Volume Variances
40,000
39,000
41,000
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