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The master budget at Western Company last period called for sales of 225,000 units at $9 each. The costs were estimated to be $3.75 variable per unit and $225,000 fixed. During the period, actual production and actual sales were 230,000 units. The selling price was $9.10 per unit. Variable costs were $4.50 per unit. Actual fixed costs were $225,000. Required: 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.) Sales revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profits Actual Budget $ $ 0 0 WESTERN COMPANY Profit Variance Analysis Manufacturing Variances Sales Price Variance Flexible Budget $ $ $ Sales Activity Variance 2,070,000 $ 45,000 862,500 1,207,500 18,750 U $26,250 F 225,000 0 982,500 $26,250 F Master Budget $ 2,025,000 843,750 $ 1,181,250 $ 225,000 956,250

The master budget at Western Company last period called for sales of 225,000 units at $9 each. The costs were estimated to be $3.75 variable per unit and $225,000 fixed. During the period, actual production and actual sales were 230,000 units. The selling price was $9.10 per unit. Variable costs were $4.50 per unit. Actual fixed costs were $225,000. Required: 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.) Sales revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profits Actual Budget $ $ 0 0 WESTERN COMPANY Profit Variance Analysis Manufacturing Variances Sales Price Variance Flexible Budget $ $ $ Sales Activity Variance 2,070,000 $ 45,000 862,500 1,207,500 18,750 U $26,250 F 225,000 0 982,500 $26,250 F Master Budget $ 2,025,000 843,750 $ 1,181,250 $ 225,000 956,250

FINANCIAL ACCOUNTING
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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Vikram 

The master budget at Western Company last period called for sales of 225,000 units at $9 each. The costs were estimated to be $3.75 variable per unit and $225,000 fixed. During the period, actual production and actual sales were 230,000 units. The selling price was $9.10 per unit. Variable costs were $4.50 per unit. Actual fixed costs were $225,000. Required: 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.) Sales revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profits Actual Budget $ $ 0 0 WESTERN COMPANY Profit Variance Analysis Manufacturing Variances Sales Price Variance Flexible Budget 2,070,000 $ $ $ 862,500 1,207,500 225,000 982,500 $ Sales Activity Variance 45,000 18,750 U 26,250 F 0 26,250 F Master Budget $ 2,025,000 $ $ 843,750 1,181,250 225,000 956,250
Transcribed Image Text:The master budget at Western Company last period called for sales of 225,000 units at $9 each. The costs were estimated to be $3.75 variable per unit and $225,000 fixed. During the period, actual production and actual sales were 230,000 units. The selling price was $9.10 per unit. Variable costs were $4.50 per unit. Actual fixed costs were $225,000. Required: 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.) Sales revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profits Actual Budget $ $ 0 0 WESTERN COMPANY Profit Variance Analysis Manufacturing Variances Sales Price Variance Flexible Budget 2,070,000 $ $ $ 862,500 1,207,500 225,000 982,500 $ Sales Activity Variance 45,000 18,750 U 26,250 F 0 26,250 F Master Budget $ 2,025,000 $ $ 843,750 1,181,250 225,000 956,250
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