Required: Prepare a variance analysis report with both flexible-budget and sales-volume variances.
Required: Prepare a variance analysis report with both flexible-budget and sales-volume variances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Topic Video
Question
100%
![Flexible Budgets, Direct-Cost Variances, and Management Control
Question 2
a. Using an example, explain the concept of a flexible budget, flexible budget
variances and sales volume variances.
2b. Hasan Table Company manufactures tables for schools. The 2018 operating
budget is based on sales of 45,000 units at 55 Taka per table. Operating income
is anticipated to be 240,000 Taka. Budgeted variable costs are 35 Taka per unit,
while fixed costs total 660,000 Taka.
Actual income for 2018 was a surprising 569,000 Taka on actual sales of 46,000
units at 60 Taka each. Actual variable costs were 34 Taka per unit and fixed
costs totaled 627,000 Taka.
Required:
Prepare a variance analysis report with both flexible-budget and sales-volume
variances.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb97246e0-d46a-45d2-a0f2-be1a4be44b07%2Ffc8887a4-fb1b-4d3c-8b1b-529a5c08f60e%2F0b8zv4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Flexible Budgets, Direct-Cost Variances, and Management Control
Question 2
a. Using an example, explain the concept of a flexible budget, flexible budget
variances and sales volume variances.
2b. Hasan Table Company manufactures tables for schools. The 2018 operating
budget is based on sales of 45,000 units at 55 Taka per table. Operating income
is anticipated to be 240,000 Taka. Budgeted variable costs are 35 Taka per unit,
while fixed costs total 660,000 Taka.
Actual income for 2018 was a surprising 569,000 Taka on actual sales of 46,000
units at 60 Taka each. Actual variable costs were 34 Taka per unit and fixed
costs totaled 627,000 Taka.
Required:
Prepare a variance analysis report with both flexible-budget and sales-volume
variances.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 5 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education