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.)
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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
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Thankyou.
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
35,000
$ 385,000
215,000
148,125
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.)
Master
Budget
40,000
$ 460,000
275,000
140,000
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.)
Actual operating income
Master budget operating income
1.
2.
3. Total master budget variance
4.
Total flexible-budget variance
Sales volume variance
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