White Mountain Sled Company manufactures children's snow sleds. The company's performance report for November is as follows.ActualBudgetSleds sold5,0006,000Sales$240,000$300,000Variable costs150,000180,000Contribution margin$ 90,00084,000$120,000Fixed costs80,000Operating income$6,000$ 40,000The company uses sales variance analysis to explain the difference between budgeted and actual sales revenue.Required:Compute the following variances and indicate whether each is favorable or unfavorable. (Select "None" for no effect (i.e., zerovariance).)1.November sales-price variance2.November sales-volume variance

Formulas for sales price and sales volume variance Sales price variance = AQ * ( ASP - SSP) Sales…

Answered: White Mountain Sled Company…

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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Jay Banning, CEO and a major stockholder of Banning Incorporated, was unhappy with its operating results for the past year. The company manufactures two environmentally friendly industrial caliber cleaning machines used primarily in automobile repair shops, gas stations, and auto dealerships. The master budget and operating results for the year (000s omitted except for the selling price per unit) follow: Sales Variable cost Contribution Fixed cost Operating income Units sold Unit selling price CM Flexible budget variance CM Sales volume variance CM Sales quantity variance CM Sales mix variance Actual T10 $ 132,000 61,700 $ 70,300 10,000 $ 60,300 1,200 $ S40 $ 58,695 28,000 $ 30,695 10,000 $ 20,695 1,505 T10 15,300 Favorable Favorable Favorable $ (14,101) Unfavorable Budget T10 $ 105,000 50,000 $ 55,000 10,000 $ 45,000 $ 100 Required: 1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and…
Mia Wiz sells computers. During May, it sold 500 computers at a $800 per unit price. The fixed budget for May predicted sales of 550 computers at an per unit price of $780. AQ = Actual QuantitySQ = Standard QuantityAP = Actual PriceSP = Standard Price 1&2. Compute the sales price variance and the sales volume variance for May. Identify it as favorable or unfavorable. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.)
Komatsu company’s budget for sales was 1,000 of small size tractor for $1,200 per the tractor. The company’s actual sales was $1,365,000, sales units for 1,300 bikes. What are the Sales Price Variance and Sales Activity Variance? And show in graph.
A machine distributor sells two models, basic and deluxe. The following information relates to its master budget. Basic Deluxe Sales (units) 10,400 2,600 Sales price per unit $ 9,200 $ 13,200 Variable costs per unit $ 8,320 $ 10,200 Actual sales were 8,200 basic models and 4,000 deluxe models. The actual sales prices were the same as the budgeted sales prices for both models.What is the sales mix variance for the deluxe model? Multiple Choice $4,457,000. $2,184,000. $4,680,000. $2,496,000.
Creepers, Inc., manufactures stuffed spiders and mummies. During September the following information was gathered: Spiders Mummies Units sold 6,300 3,700 Budgeted sales (units) 6,900 3,100 Contribution margin per unit: Actual $ 4.00 $ 6.05 Budgeted $ 3.00 $ 5.35 What is the sales mix variance for Spiders? Multiple Choice $1,227 favorable. $5,236 unfavorable. $1,636 favorable. $1,800 unfavorable. $5,236 favorable.
Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three products-sinks, mirrors, and vanities. Budgeted sales by product and in total for the coming month are shown below based on planned unit sales as follows: Sinks Mirrors Vanities Total Percentage of total sales Sales Variable expenses Contribution margin unit Units Percentage 50% 600 300 300 1,200 Contribution margin per Fixed expenses Operating income 25% 25% 100% S Sinks 46% 319.99 $239,992.00 100% $157,200 100% $126,808.00 100% $524,000.00 100% 47,998.40 20% 125,760 80% 63,404.00 50% 237,162.40 45% $191,993.60 80% $ 31,440 20% $63,404.00 50% 286,837.60 55% Break-even point in sales dollars - Product Mirrors 30% S 104.80 Fixed expenses Overall CM ratio $248,050 $239.03* $248,050 0.55 Vanities 24% 1,037.73 units $ 211.35 Total 100% =$451,000 Break-even point in unit sales: Total Fixed expenses Weighted average CM per unit *($319.99 x 0.50) + ($104.80 x 0.25)+($211.35 × 0.25)…
Titanium Blades refines titanium for use in all brands of razor blades. It prepared a static budget for the sales of 5,500 units. The following variances were observed: Units Sales Variable Expenses Fixed Expenses Net Income (loss) Units Sales Determine the static budget and use the information to prepare a flexible budget and analysis for the 6,500 units actually sold. If no effect, select "No Effect" and leave the amount boxes blank. For those boxes in which you must nter negative numbers use a minus sign. (Example: -300). > Static budget Flexible budget Variable Expenses Fixed Expenses Actual Results Net Income (Loss) $175,500 $27,000 Favorable 77,800 11,800 Unfavorable 93,800 300 Unfavorable $3,900 $14,900 Unfavorable LA 5,500 ✔ $ 148,500✔ 66,000 X Variances 93,500 X -11,000 ✓ 6,500 $ 175,500 ✓ $ 11,800 X 93,500 X 4,000 Actual Results $ 175,500✔ LA 93,800 X 93,800 X 3,900 ✔ $ tA LA 0 Variances ✓ No Effect 200✔ Favorable 300 X Unfavora 100 X Unfavora
Carson CPAS specializes in preparing 1040EZ returns for low-income clients. The firm charged $100 per return this year and budgeted $100 per return. Additional information for the firm includes: Actual Budgeted 800 750 $37,500 12,000 Returns processed Variable costs Fixed costs Prepare Carson's static budget and the static budget performance report. Note: Do not use negative signs with any of your answers. Note: Indicate whether the variance is favorable (F) or unfavorable (U) using the drop-down menu in the last column next to the variable amount. Budgeted returns Actual returns Returns processed variance Revenue Variable costs Fixed costs Net income $36,000 12,500 $ $ Actual Results 0 For U $ 0$ Budget Results $ 0$ Variances 0 0 0 0 For U ♦ + >
Mia Wiz sells computers. During May, it sold 300 computers at a $800 per unit price. The fixed budget for May predicted sales of 350 computers at an per unit price of $780. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price 1&2. Compute the sales price variance and the sales volume variance for May. Identify it as favorable or unfavorable. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual Sales $ Flexible Budget 0 0 $ 0 Budgeted Sales
Crystal Glassware Company has the following standards and flexible-budget data. 6.00 per direct-labor hour 3 hours per unit of output Standard variable-overhead rate Standard quantity of direct labor Budgeted fixed overhead Budgeted output $150,000 25,000 units Actual results for April are as follows: Actual output Actual variable overhead Actual fixed overhead Actual direct labor 16,000 units $384,000 $141,000 55,000 hours Required: Use the variance formulas to compute the following variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).) 1. Variable-overhead spending variance 2. Variable-overhead efficiency variance 3. Fixed-overhead budget variance 4. Fixed-overhead volume variance
The following data were collected by Pete Inc. for the month of May: Static budget data: Sales Variable costs Total fixed costs Actual results: Sales Variable costs Total fixed costs Sales (units) Revenue Variable expenses Contribution margin 11,500 units @ 40/unit $28.00 per unit $ 24,150 Required: 1, 2 & 3. Prepare the static and flexible budgets and show the variances by completing the table given below. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Fixed expenses Income 12,600 units @ $39/unit $30.00 per unit $ 23,050 Actual Pete Inc. Static Budget Performance Report For the Month Ended May 31 Flexible Budget Flexible Budget Variance Sales Volume Variance Static Budget Static Variance
Titanium Blades refines titanium for use in all brands of razor blades. It prepared a static budget for the sales of 5,500 units. The following variances were observed: Units Sales Variable Expenses Fixed Expenses Net Income (loss) Units Sales Actual Results Determine the static budget and use the information to prepare a flexible budget and analysis for the 6,500 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 Variable Expenses Fixed Expenses Net Income (Loss) Variances $ $169,000 $26,000 Favorable 77,800 11,800 Unfavorable 88,300 300 Unfavorable $2,900 $13,900 Unfavorable No Effect Favorable Unfavorable Unfavorable ✓ ✓ ✓ ✓

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