Don't use AI. The fixed budget for 21,300 units of production shows sales of $489, 900; variable costs of $63,900; and fixed costs of $144,000.The company's actual sales were 27,500 units at $583,500. Actual variable costs were $113,400 and actual fixed costswere $132,000.Prepare a flexible budget performance report. Indicate whether each variance is favorable or unfavorable.Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.

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Answered: The fixed budget for 21,300 units of…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 33P

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Cortez Manufacturing, Inc. has the following flexible budget formulas and amounts: Actual results for May for the production and sale of 5,000 units were as follows: Prepare a performance report for May that includes the identification of the favorable and unfavorable variances.
Marten Company has a cost-benefit policy to investigate any variance that is greater than 1,000 or 10% of budget, whichever is larger. Actual results for the previous month indicate the following: The company should investigate: a. neither the materials variance nor the labor variance. b. the materials variance only. c. the labor variance only. d. both the materials variance and the labor variance.
A firm comparing the actual variable costs of producing 10,000 units with the total variable costs of a static budget based on 9,000 units would probably see a. no variances. b. small favorable variances. c. large unfavorable variances. d. large favorable variances. e. small unfavorable variances.
Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for the upcoming year. Past trends have indicated the following dollars were spent at three different levels of output: In establishing a budget for 14,000 units, Taylor should treat A, B, and C costs as: a. semivariable, fixed, and variable, respectively. b. variable, fixed, and variable, respectively. c. semivariable, semivariable, and semivariable, respectively. d. variable, semivariable, and semivariable, respectively.
Kavallia Company set a standard cost for one item at 328,000; allowable deviation is 14,500. Actual costs for the past six months are as follows: Required: 1. Calculate the variance from standard for each month. Which months should be investigated? 2. What if the company uses a two-part rule for investigating variances? The allowable deviation is the lesser of 4 percent of the standard amount or 14,500. Now which months should be investigated?
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Prepare a profit variance analysis. (Indicate the effect of each variance by selecting “F” for favorable, or “U” for unfavorable. If there is no effect, do not select either option.)
The fixed budget for 21,000 units of production shows sales of $462,000; variable costs of $63,000; and fixed costs of $144,000. The company’s actual sales were 26,700 units at $543,400. Actual variable costs were $113,700 and actual fixed costs were $135,000.Prepare a flexible budget performance report. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.)
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9) Ehrlich Corporation compares monthly actual operating results to a static budget prepared at the beginning of the month. When the actual level of activity is less than budgeted, which of the following would be true? Group of answer choices a. Variable costs would show unfavorable variances. b. Variable costs would show favorable variances. c. Fixed costs would show favorable variances. d. Fixed costs would show unfavorable variances.
Complete the following partial flexible budget performance report, and indicate whether each variance is favorable or unfavorable. The company budgets a selling price of $80 per unit and variable costs of $36 per unit. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Flexible Budget Performance Report Flexible Budget For Month Ended June 30 (11,100 units) Sales Variable costs Contribution margin Fixed costs Income Actual Results Variances Favorable/Unfavorable (11,100 units) $ 27,000 Favorable 354,000 488,400 273,000 288,000

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