Zachary Manufacturing Company established the following standard price and cost data: Sales price $ 8.10 per unit Variable manufacturing cost $ 3.10 per unit Fixed manufacturing cost $2,100 total Fixed selling and administrative cost $900 total Zachary planned to produce and sell 2,900 units. Actual production and sales amounted to 3,100 units. Assume that the actual sales price is $7.75 per unit and that the actual variable cost is $3.30 per unit. The actual fixed manufacturing cost is $1,400, and the actual selling and administrative costs are $930. Required a.&b. Determine the flexible budget variances and classify the effect of each variance by selecting favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance).
Zachary Manufacturing Company established the following standard price and cost data: Sales price $ 8.10 per unit Variable manufacturing cost $ 3.10 per unit Fixed manufacturing cost $2,100 total Fixed selling and administrative cost $900 total Zachary planned to produce and sell 2,900 units. Actual production and sales amounted to 3,100 units. Assume that the actual sales price is $7.75 per unit and that the actual variable cost is $3.30 per unit. The actual fixed manufacturing cost is $1,400, and the actual selling and administrative costs are $930. Required a.&b. Determine the flexible budget variances and classify the effect of each variance by selecting favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Zachary Manufacturing Company established the following standard price and cost data:
Sales price
Variable manufacturing cost
Fixed manufacturing cost
Fixed selling and administrative cost $900
$8.10
$ 3.10
$2,100 total
per unit
per unit
total
Zachary planned to produce and sell 2,900 units. Actual production and sales amounted to 3,100 units.
Assume that the actual sales price is $7.75 per unit and that the actual variable cost is $3.30 per unit. The actual fixed manufacturing
cost is $1,400, and the actual selling and administrative costs are $930.
Required
a.&b. Determine the flexible budget variances and classify the effect of each variance by selecting favorable (F) or unfavorable (U).
Note: Select "None" if there is no effect (i.e., zero variance).
Transcribed Image Text:Answer is complete but not entirely correct.
Flexible Budget
Variances
VU
U
U
F
U
SVO
Sales
Variable manufacturing
Contribution margin
Fixed manufacturing
Fixed selling and administrative
cost
Net income (loss)
$
69
33333
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