The following data are for the month of January for the Sterling Company: Sales Variable costs Total fixed costs Actual results 9,600 pairs at $87 per pair $72 per pair 109,200 Required: (a) Compute the static budget operating income. Static budget 9,000 pairs at $90 per pair $69 per pair 108,000 (b) Compute the sales-activity variances for sales revenues and total variable costs respectively. Indicate whether each variance is favorable or unfavorable. (c) Compute the flexible budget variance for operating income. Indicate whether the variance is favorable or unfavorable.

The following data are for the month of January for the Sterling Company: Sales Variable costs Total fixed costs Actual results 9,600 pairs at $87 per pair $72 per pair 109,200 Required: (a) Compute the static budget operating income. Static budget 9,000 pairs at $90 per pair $69 per pair 108,000 (b) Compute the sales-activity variances for sales revenues and total variable costs respectively. Indicate whether each variance is favorable or unfavorable. (c) Compute the flexible budget variance for operating income. Indicate whether the variance is favorable or 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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