RTI Company's master budget calls for production and sale of 18,900 units for $98,280, variable costs of $43,470, and fixed costs of $18,400. During the most recent period, the company incurred $32,900 of variable costs to produce and sell 18,400 units for $85,900. During this same period, the company earned $25,900 of operating income. Required: 1. Determine the following for RTI Company: (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) a. Flexible budget operating income. b. Flexible budget variance, in terms of contribution margin. Was this variance favorable or unfavorable? c. Flexible budget variance, in terms of operating income. Was this variance favorable or unfavorable? d. Sales volume variance, in terms of contribution margin. Was this variance favorable or unfavorable? e. Sales volume variance, in terms of operating income. Was this variance favorable or unfavorable? a. Flexible budget operating income b. Flexible budget variance (contribution margin) c. Flexible budget variance (operating income) d. Sales volume variance (contribution margin) Sales volume variance (operating income) e Unfavorable Unfavorable Unfavorable Unfavorable

RTI Company's master budget calls for production and sale of 18,900 units for $98,280, variable costs of $43,470, and fixed costs of $18,400. During the most recent period, the company incurred $32,900 of variable costs to produce and sell 18,400 units for $85,900. During this same period, the company earned $25,900 of operating income. Required: 1. Determine the following for RTI Company: (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) a. Flexible budget operating income. b. Flexible budget variance, in terms of contribution margin. Was this variance favorable or unfavorable? c. Flexible budget variance, in terms of operating income. Was this variance favorable or unfavorable? d. Sales volume variance, in terms of contribution margin. Was this variance favorable or unfavorable? e. Sales volume variance, in terms of operating income. Was this variance favorable or unfavorable? a. Flexible budget operating income b. Flexible budget variance (contribution margin) c. Flexible budget variance (operating income) d. Sales volume variance (contribution margin) Sales volume variance (operating income) e Unfavorable Unfavorable Unfavorable Unfavorable

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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Based on a predicted level of production and sales of 24,000 units, a company anticipates total contribution margin of $79,200, fixed costs of $24,000, and operating income of $55,200. Based on this information, the budgeted operating income for 21,000 units would be: Multiple Choice $55,200. $103,200. $45,300. $44,571. $79,200.
i Required information [The following information applies to the questions displayed below] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month Variable Element per Customer Served Actual Total for May $ 6,600 $ 213,500 $ 62,000 $ 2,300 $ 141,100 $ 540 $ 15,700 $ 41,000 $ 38,900 When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers. 5. What activity variances would Adger report with respect to each of its expenses for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive…
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