Answered: Titanium Blades refines titanium for…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1CMA: Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for...

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Question

Titanium Blades refines titanium for use in all brands of razor blades. It prepared a static budget for the sales of 5,000 units. The following variances were observed:

	Actual Results	Variances
Units
Sales	$150,000	$25,000	Favorable
Variable Expenses	71,900	11,900	Unfavorable
Fixed Expenses	75,200	200	Unfavorable
Net Income (loss)	$2,900	$12,900	Unfavorable

Determine the static budget and use the information to prepare a flexible budget and analysis for the 6,000 units actually sold. If no effect, select "No Effect" and leave the amount boxes blank. For those boxes in which you must enter negative numbers use a minus sign. (Example: -300).

	Static budget	Flexible budget	Actual Results	Variances
Units	fill in the blank 1	fill in the blank 2
Sales	$fill in the blank 3	$fill in the blank 4	$fill in the blank 5	$fill in the blank 6
Variable Expenses	fill in the blank 8	fill in the blank 9	fill in the blank 10	fill in the blank 11
Fixed Expenses	fill in the blank 13	fill in the blank 14	fill in the blank 15	fill in the blank 16
Net Income (Loss)	$fill in the blank 18	$fill in the blank 19	$fill in the blank 20	$fill in the blank 21

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