Someofthecompanysdatawas

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Unformatted text preview: cord materials used? • Example: • • • • Materials Control Direct­Materials Price Variance Accounts Payable Control (favorable variance) 690,625 12,750 677,875 Chapter 7 Chapter 7 • You need to know: • Benchmarking: Chapter 7 Chapter 7 • Regier Company had planned for operating income of • • • • • $10 million in the master budget but actually achieved operating income of only $7 million. a. The static­budget variance for operating income is $3 million favorable. b. The static­budget variance for operating income is $3 million unfavorable. c. The flexible­budget variance for operating income is $3 million favorable. d. The flexible­budget variance for operating income is $3 million unfavorable. Chapter 7 Chapter 7 • Regier Company had planned for operating income of • • • • • $10 million in the master budget but actually achieved operating income of only $7 million. a. The static­budget variance for operating income is $3 million favorable. b. The static­budget variance for operating income is $3 million unfavorable. c. The flexible­budget variance for operating income is $3 million favorable. d. The flexible­budget variance for operating income is $3 million unfavorable. Answer: b Chapter 7 Chapter 7 • JJ White planned to use $82 of material per unit but actually used $80 of material per unit, and planned to make 1,200 units but actually made 1,000 units. – The flexible­budget amount is – The flexible­budget variance is – The sales­volume variance is Chapter 7 Chapter 7 • JJ White planned to use $82 of material per unit but actually used $80 of material per unit, and planned to make 1,200 units but actually made 1,000 units. – The flexible­budget amount is • 1,000 units x $82 = $82,000 – The flexible­budget variance is ($80 ­ $82) x 1,000 = $2,000 F The sales­volume variance is • (1,000 – 1,200) x $82 = $16,400 U Chapter 7 Chapter 7 • Peters’ Company manufacturers tires. Some of the company's data was misplaced. Use the following information to replace the lost data: Chapter 7 Chapter 7 Actual Results Units sold Revenues Variable costs Fixed costs Operating income #225,000 $84,160 (C) $16,560 $35,480 $2,000 F $400 U $1,720 F (D) Flexible-Budget Variances Flexible Budget #225,000 (A) $31,720 $18,280 $32,160 Sales-Volume Variances Static Budget #206,250 $2,800 U $4,680 F 0 (E) (B) $36,400 $18,280 $30,280 Chapter 7...
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