Compute the following for the Company, RTI. a. Flexible-budget operating income. b. Flexible- budget variance , in terms of contribution margin. c. Flexible-budget variance, in terms of operating income. d. Sales volume variance, in terms of contribution margin. e. Sales volume variance, in terms of operating income.

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Answer 1

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 14, Problem 30E

1.

To determine

Compute the following for the Company, RTI.

a. Flexible-budget operating income.

b. Flexible-budget variance, in terms of contribution margin.

c. Flexible-budget variance, in terms of operating income.

d. Sales volume variance, in terms of contribution margin.

e. Sales volume variance, in terms of operating income.

2.

To determine

Explain the reason for the variance in contribution margin sales volume and the variance in operating revenue sales volume are probable to be similar for the same period.

3.

To determine

Explain the reason why the flexible-budget variance in the contribution margin will probably be different from the flexible-budget variance in operating income for the same period.

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Answer 2

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 14, Problem 30E

1.

To determine

Compute the following for the Company, RTI.

a. Flexible-budget operating income.

b. Flexible-budget variance, in terms of contribution margin.

c. Flexible-budget variance, in terms of operating income.

d. Sales volume variance, in terms of contribution margin.

e. Sales volume variance, in terms of operating income.

2.

To determine

Explain the reason for the variance in contribution margin sales volume and the variance in operating revenue sales volume are probable to be similar for the same period.

3.

To determine

Explain the reason why the flexible-budget variance in the contribution margin will probably be different from the flexible-budget variance in operating income for the same period.

Expert Solution & Answer

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Answer 3

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 14, Problem 30E

1.

To determine

Compute the following for the Company, RTI.

a. Flexible-budget operating income.

b. Flexible-budget variance, in terms of contribution margin.

c. Flexible-budget variance, in terms of operating income.

d. Sales volume variance, in terms of contribution margin.

e. Sales volume variance, in terms of operating income.

2.

To determine

Explain the reason for the variance in contribution margin sales volume and the variance in operating revenue sales volume are probable to be similar for the same period.

3.

To determine

Explain the reason why the flexible-budget variance in the contribution margin will probably be different from the flexible-budget variance in operating income for the same period.

Expert Solution & Answer

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Answer 4

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 14, Problem 30E

1.

To determine

Compute the following for the Company, RTI.

a. Flexible-budget operating income.

b. Flexible-budget variance, in terms of contribution margin.

c. Flexible-budget variance, in terms of operating income.

d. Sales volume variance, in terms of contribution margin.

e. Sales volume variance, in terms of operating income.

2.

To determine

Explain the reason for the variance in contribution margin sales volume and the variance in operating revenue sales volume are probable to be similar for the same period.

3.

To determine

Explain the reason why the flexible-budget variance in the contribution margin will probably be different from the flexible-budget variance in operating income for the same period.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 30E

1.

To determine

Compute the following for the Company, RTI.

a. Flexible-budget operating income.

b. Flexible-budget variance, in terms of contribution margin.

c. Flexible-budget variance, in terms of operating income.

d. Sales volume variance, in terms of contribution margin.

e. Sales volume variance, in terms of operating income.

2.

To determine

Explain the reason for the variance in contribution margin sales volume and the variance in operating revenue sales volume are probable to be similar for the same period.

3.

To determine

Explain the reason why the flexible-budget variance in the contribution margin will probably be different from the flexible-budget variance in operating income for the same period.

Answer 6

Chapter 14, Problem 30E

1.

To determine

Compute the following for the Company, RTI.

a. Flexible-budget operating income.

b. Flexible-budget variance, in terms of contribution margin.

c. Flexible-budget variance, in terms of operating income.

d. Sales volume variance, in terms of contribution margin.

e. Sales volume variance, in terms of operating income.

Answer 7

Chapter 14, Problem 30E

1.

To determine

Compute the following for the Company, RTI.

a. Flexible-budget operating income.

b. Flexible-budget variance, in terms of contribution margin.

c. Flexible-budget variance, in terms of operating income.

d. Sales volume variance, in terms of contribution margin.

e. Sales volume variance, in terms of operating income.

Answer 8

2.

To determine

Explain the reason for the variance in contribution margin sales volume and the variance in operating revenue sales volume are probable to be similar for the same period.

Answer 9

2.

To determine

Explain the reason for the variance in contribution margin sales volume and the variance in operating revenue sales volume are probable to be similar for the same period.

Answer 10

3.

To determine

Explain the reason why the flexible-budget variance in the contribution margin will probably be different from the flexible-budget variance in operating income for the same period.

Answer 11

3.

To determine

Explain the reason why the flexible-budget variance in the contribution margin will probably be different from the flexible-budget variance in operating income for the same period.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 14 - Prob. 1Q Ch. 14 - Explain how standard costs and flexible budgets...Ch. 14 - Explain what is meant by the term management by...Ch. 14 - Prob. 4Q Ch. 14 - Prob. 5Q Ch. 14 - Prob. 6Q Ch. 14 - Prob. 7Q Ch. 14 - Prob. 8Q Ch. 14 - Prob. 9Q Ch. 14 - Prob. 10Q

Explain the reason for the variance in contribution margin sales volume and the variance in operating revenue sales volume are probable to be similar for the same period.

Explain the reason why the flexible-budget variance in the contribution margin will probably be different from the flexible-budget variance in operating income for the same period.

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Chapter 14 Solutions