The master budget at Monroe Manufacturing last period called for sales of 43,200 units at $54 each. The costs were estimated to be $38 variable per unit and $536,000 fixed. During the period, actual production and actual sales were 46,200 units. The selling price was $53 per unit. Variable costs were $40 per unit. Actual fixed costs were $527,000. Required: Prepare a profit variance analysis. Note: 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. Sales revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profits $ $ Actual 0 0 Monroe Manufacturing Profit Variance Analysis Manufacturing Variances Sales Price Variance Flexible Budget $ $ 0 0 Sales Activity Variance Master Budget $ $ 0 0
The master budget at Monroe Manufacturing last period called for sales of 43,200 units at $54 each. The costs were estimated to be $38 variable per unit and $536,000 fixed. During the period, actual production and actual sales were 46,200 units. The selling price was $53 per unit. Variable costs were $40 per unit. Actual fixed costs were $527,000. Required: Prepare a profit variance analysis. Note: 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. Sales revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profits $ $ Actual 0 0 Monroe Manufacturing Profit Variance Analysis Manufacturing Variances Sales Price Variance Flexible Budget $ $ 0 0 Sales Activity Variance Master Budget $ $ 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:The master budget at Monroe Manufacturing last period called for sales of 43,200 units at $54 each. The costs were estimated to be
$38 variable per unit and $536,000 fixed. During the period, actual production and actual sales were 46,200 units. The selling price
was $53 per unit. Variable costs were $40 per unit. Actual fixed costs were $527,000.
Required:
Prepare a profit variance analysis.
Note: 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.
Sales revenue
Less:
Variable costs
Contribution margin
Less:
Fixed costs
Operating profits
$
$
Actual
0
0
Monroe Manufacturing
Profit Variance Analysis
Manufacturing
Variances
Sales Price Variance Flexible Budget
$
$
0
0
Sales Activity
Variance
Master Budget
$
$
0
0
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