Acct 3270 Chapter 7 Solutions

Acct 3270 Chapter 7 Solutions - 7-16 (2030 min.) Flexible...

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Unformatted text preview: 7-16 (2030 min.) Flexible budget. Actual Results (1) Flexible-Budget Variances (2) = (1) (3) Flexible Budget (3) Sales-Volume Variances (4) = (3) (5) Static Budget (5) Units sold2,800g2,800200U 3,000gRevenues$313,600a$ 5,600 F $308,000b$22,000 U$330,000cVariable costs 229,600d22,400U 207,200e14,800F 222,000fContribution margin 84,000 16,800 U 100,800 7,200 U 108,000 Fixed costs 50,000g4,000F 54,000g54,000gOperating income $ 34,000$12,800 U $ 46,800$ 7,200 U $ 54,000$12,800 U $ 7,200 UTotal flexible-budget variance Total sales-volume variance $20,000 U Total static-budget variance a$112 2,800 = $313,600b$110 2,800 = $308,000 c$110 3,000 = $330,000 dGiven. Unit variable cost = $229,600 2,800 = $82 per tire e$74 2,800 = $207,200 f$74 3,000 = $222,000 gGiven2. The key information items are: Actual Budgeted Units Unit selling price Unit variable cost Fixed costs 2,800 $ 112 $ 82 $50,000 3,000 $ 110 $ 74 $54,000 The total static-budget variance in operating income is $20,000 U. There is both an unfavorable total flexible-budget variance ($12,800) and an unfavorable sales-volume variance ($7,200). The unfavorable sales-volume variance arises solely because actual units manufactured and sold were 200 less than the budgeted 3,000 units. The unfavorable flexible-budget variance of $12,800 in operating income is due primarily to the $8 increase in unit variable costs. This increase in unit variable costs is only partially offset by the $2 increase in unit selling price and the $4,000 decrease in fixed costs. 7-17(15 min.) Flexible budget. The existing performance report is a Level 1 analysis, based on a static budget. It makes no adjustment for changes in output levels. The budgeted output level is 10,000 unitsdirect materials of $400,000 in the static budget budgeted direct materials cost per attach case of $40. The following is a Level 2 analysis that presents a flexible-budget variance and a sales-volume variance of each direct cost category: Actual Results (1) Flexible- Budget Variances (2) = (1) (3) FlexibleBudget (3) Sales- Volume Variances (4) = (3) (5) Static Budget (5) Output units Direct materials Direct manufacturing labor Direct marketing labor...
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This note was uploaded on 03/27/2008 for the course ACCT 3270 taught by Professor Olvera during the Spring '08 term at North Texas.

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Acct 3270 Chapter 7 Solutions - 7-16 (2030 min.) Flexible...

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