The next year's budget for Trend, Inc., a multi-product company, is given below: Product A Product B Sales $ 1,908,000 $1,395,000 Variable costs 847,710 536,670 Fixed costs 518,000 518,000 Net income 542,290 340,330 Units 277,200 118,800 At the end of the year, the total fixed costs and the variable costs per unit were exactly as budgeted, but the following units per product line were sold. Trend, Inc. analyzes the effects its sales variances have on the profitability of the company. Product Lines Units Sales A 265,650 $ 119,350 B 131,770 $ 1,515,010 Is the total sales mix variance favorable or unfavorable? Favorable. Unfavorable.

The next year's budget for Trend, Inc., a multi-product company, is given below: Product A Product B Sales $ 1,908,000 $1,395,000 Variable costs 847,710 536,670 Fixed costs 518,000 518,000 Net income 542,290 340,330 Units 277,200 118,800 At the end of the year, the total fixed costs and the variable costs per unit were exactly as budgeted, but the following units per product line were sold. Trend, Inc. analyzes the effects its sales variances have on the profitability of the company. Product Lines Units Sales A 265,650 $ 119,350 B 131,770 $ 1,515,010 Is the total sales mix variance favorable or unfavorable? Favorable. Unfavorable.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 300,000 units with revenues of $3,300,000. Total variable costs were budgeted at $2,100,000 and fixed costs at $975,000. During the period, actual production and actual sales were 280,000 units. The actual revenues were $3,450,000. Actual variable costs were $11.50 per unit. Actual fixed costs were $1,005,000. Required: Prepare a flexible budget for Cherrylawn Corporation.
Dog
Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and management needs to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales. Flexible Budget Sales Cost of Goods Sold Direct Material Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead Cost of Goods Sold Gross Profit Variable Sales and Administrative Expenses Fixed Sales and Administrative Expenses Income Before Taxes Taxes Net Income/Loss 100,000 80,000 90,000 $3,370,000 $ $900,000 $ 900,000 230,000 70,000 $2,100,000 $ $1,270,000 100,000 960,000 $210,000 $ 63,000 $147,000 $ $ $
Felsen Industries manufactures basketballs. The budgeted income statement for the year, before any special orders, is as follows: Per Unit $10.00 Amount $4,000,000 3,200,000 800,000 300,000 $500,000 Sales Cost of goods sold Gross Profit Selling expenses Operating income 8.00 2.00 .75 $1.25 Fixed costs included in the above data are $1,200,000 in cost of goods sold and $100,000 in selling expenses. A special order offering to buy 50,000 basketballs for $7.50 each was made to Felsen. There will be no additional selling expenses if the order is accepted. Assuming Felsen has enough capacity to manufacture 50,000 more basketballs, or decreased as a result of accepting the special order? $ decrease] (circle one) what amount would operating income be increased [increase,
The following data relate to a year's budgeted activity for Coronado Limited, a company that manufactures one product: Beginning inventory Production Available for sale Sales Ending inventory Units 40,480 (a) 141,680 Selling price Variable manufacturing costs Variable selling, general, and administrative expenses Fixed manufacturing costs (based on 100,000 units) Fixed selling, general, and administrative expenses (based on 100,000 units) 182,160 131,560 50,600 Break-even sales Per unit $9.00 units 2.00 3.00 Total fixed costs and expenses remain unchanged within the relevant range of 25,000 units to a total capacity of 160,000 units. 0.50 0.80 Calculate the projected annual break-even sales in units. (Round answer to O decimal places, e.g. 5,275.)
The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,000 units with revenues of $3,300,000. Total variable costs were budgeted at $1,925,000 and fixed costs at $950,000. During the period, actual production and actual sales were 255,000 units. The actual revenues were $3,442,500. Actual variable costs were $6.50 per unit. Actual fixed costs were $980,000. Required: Prepare a profit variance analysis. Specifically Sales Price Variance, Sales Activity Variance, and the Master Budget. 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.
The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,000 units with revenues of $3,300,000. Total variable costs were budgeted at $1,925,000 and fixed costs at $950,000. During the period, actual production and actual sales were 255,000 units. The actual revenues were $3,442,500. Actual variable costs were $6.50 per unit. Actual fixed costs were $980,000. Required: Prepare a flexible budget for Cherrylawn Corporation.
The following data have been extracted from the budgets of Kelvin Ltd,a company that manufacture and sells a single product $per unit Selling price Direct material cost Direct wages Variable overhead Fixed overhead 45 10 4 2.50 1.50 Fixed production overhead costs are budgeted at $400,000 per annum. Normal production levels are expected to be 200,000 units per annum. Actual Fixed Production overheads are $120,000 Budgeted administration costs are $120,000 per annum. The following pattern of sales and production is expected during 2003: Sales (units) Production (units) 60,000 70,000 You are required a. To prepare budgeted profit statements for the year using (i) (ii) Marginal Costing Absorption Costing b. To reconcile the profits for the year
Sunland Company has accumulated the following budget data for the year 2027. 1. 2. 3. 4. 5. Sales: 31,450 units, unit selling price $85. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $13 per hour, and manufacturing overhead $6 per direct labor hour. Inventories (raw materials only): beginning, 10,290 pounds; ending, 15,250 pounds. Selling and administrative expenses: $170,000; interest expense: $30,000. Income taxes: 20% of income before income taxes.
RTI Company's master budget calls for production and sale of 18,900 units for $98,280, variable costs of $43,470, and fixed costs of $18,400. During the most recent period, the company incurred $32,900 of variable costs to produce and sell 18,400 units for $85,900. During this same period, the company earned $25,900 of operating income. Required: 1. Determine the following for RTI Company: (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) a. Flexible budget operating income. b. Flexible budget variance, in terms of contribution margin. Was this variance favorable or unfavorable? c. Flexible budget variance, in terms of operating income. Was this variance favorable or unfavorable? d. Sales volume variance, in terms of contribution margin. Was this variance favorable or unfavorable? e. Sales volume variance, in terms of operating income. Was this variance favorable or unfavorable? a. Flexible budget operating income b. Flexible budget variance…
The master budget at Western Company last period called for sales of 225,200 units at $9.20 each. The costs were estimated to be $3.77 variable per unit and $225,200 fixed. During the period, actual production and actual sales were 230,200 units. The selling price was $9.30 per unit. Variable costs were $4.70 per unit. Actual fixed costs were $225,200. 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.)
Brodrick Company expects to produce 21,700 units for the year ending December 31. A flexible budget for 21,700 units of production reflects sales of $542,500; variable costs of $65,100; and fixed costs of $143,000. If the company instead expects to produce and sell 27,300 units for the year, calculate the expected level of income from operations.