Required: 1. What was the actual operating income for the period? 2. What was the company's master budget operating income for the period? 3. (a) What was the total master budget variance, in terms of operating income, for the period? (b) is this variance favorab unfavorable? (If a variance has no amount, select "None" in the corresponding dropdown cell.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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As the new accountant for Cohen & Company, you have been asked to provide a succinct analysis of financial performance for the
year just ended. You obtain the following information that pertains to the company's sole product:
Units sold
Sales
Variable costs
Fixed costs
Actual
4.
40,000
$ 380,000
210,000
145,000
Required:
1. What was the actual operating income for the period?
2. What was the company's master budget operating income for the period?
3. (a) What was the total master budget variance, in terms of operating income, for the period? (b) Is this variance favorable or
unfavorable? (If a variance has no amount, select "None" in the corresponding dropdown cell.)
4. The total master budget variance for a period can be decomposed into a total flexible budget variance and a sales volume variance.
(a) What was the total flexible-budget variance for the period? (b) Was this variance favorable or unfavorable? (c) What was the sales
volume variance for the period? (d) Was this variance favorable or unfavorable? (If a variance has no amount, select "None" in the
corresponding dropdown cell.)
1.
Actual operating income
2 Master budget operating income
3.
Total master budget variance
Total flexible-budget variance
Sales volume variance
Master
Budget
45,000
$ 450,000
270,000
135,000
45,000
Transcribed Image Text:As the new accountant for Cohen & Company, you have been asked to provide a succinct analysis of financial performance for the year just ended. You obtain the following information that pertains to the company's sole product: Units sold Sales Variable costs Fixed costs Actual 4. 40,000 $ 380,000 210,000 145,000 Required: 1. What was the actual operating income for the period? 2. What was the company's master budget operating income for the period? 3. (a) What was the total master budget variance, in terms of operating income, for the period? (b) Is this variance favorable or unfavorable? (If a variance has no amount, select "None" in the corresponding dropdown cell.) 4. The total master budget variance for a period can be decomposed into a total flexible budget variance and a sales volume variance. (a) What was the total flexible-budget variance for the period? (b) Was this variance favorable or unfavorable? (c) What was the sales volume variance for the period? (d) Was this variance favorable or unfavorable? (If a variance has no amount, select "None" in the corresponding dropdown cell.) 1. Actual operating income 2 Master budget operating income 3. Total master budget variance Total flexible-budget variance Sales volume variance Master Budget 45,000 $ 450,000 270,000 135,000 45,000
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