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# 2 3 identify actual output quantity calculate

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Unformatted text preview: anagement Control and Three step process: 1. 2. 3. Identify actual output quantity Calculate flexible budget revenues Calculate (budgeted selling price * actual quantity) (budgeted Calculate flexible budget costs (budgeted Calculate per unit cost * actual quantity + fixed costs) per Chapter 7 Flexible Budgets, Direct Cost Variances, and Management Control and Units sold Revenues Variable Costs Contribution Margin Fixed Costs Operating Income Actual Results 12,000 119,200 (68,800) 50,400 (34,000) 16,400 Static Budget 10,000 100,000 (60,000) 40,000 (30,000) 10,000 Compute the flexible budget operating income. Budgeted selling price: \$100,000 / 10,000 units = \$10 Budgeted variable cost per unit \$60,000 / 10,000 units = \$6 Flexible Budget 12,000 120,000 (72,000) 48,000 (30,000) 18,000 Units sold Revenues (12,000 * \$10) Variable Costs (12,000 * \$6) Contribution Margin Fixed Costs Operating Income Chapter 7 Flexible Budgets, Direct Cost Variances, and Management Control and Units sold Revenues Variable Costs Contribution Margin Fixed Costs Operating Income Actual Results 12,000 119,200 (68,800) 50,400 (34,000) 16,400 Actual Results 12,000 119,200 (68,800) 50,400 (34,000) 16,400 Static Budget 10,000 100,000 (60,000) 40,000 (30,000) 10,000 Flexible Budget 12,000 120,000 (72,000) 48,000 (30,000) 18,000 Compute the static budget Compute variance for operating income (note if favorable or unfavorable): unfavorable): Static budget variance Static for operating income: \$16,400 – 10,000...
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## This note was uploaded on 10/26/2009 for the course ACTP 5004 taught by Professor Montesarchio during the Summer '08 term at Nova Southeastern University.

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