The master budget at Monroe Manufacturing last period called for sales of 43,700 units at $59 each. The costs were estimated to be $43 variable per unit and $541,000 fixed. During the period, actual production and actual sales were 46,700 units. The selling price was $58 per unit. Variable costs were $45 per unit. Actual fixed costs were $532,000. Required: Prepare a sales activity 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.
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.
The
Required:
Prepare a sales activity
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.
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