sol_Ch7 - Solutions for exercises on slides 16, 17 of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Solutions for exercises on slides 16, 17 of lecture 7 Exercise: Flexible budget (slide 16) 1. Variance Analysis for Alpha Company for January 2011 Actual Results (1) Flexible- Budget Variances (2) = (1) – (3) Flexible Budget (3) Sales-Volume Variances (4) = (3) – (5) Static Budget (5) Units sold 2,800 g 0 2,800 200 U 3,000 g Revenues $313,600 a $ 5,600 F $308,000 b $22,000 U $330,000 c Variable costs 229,600 d 22,400 U 207,200 e 14,800 F 222,000 f Contribution margin 84,000 16,800 U 100,800 7,200 U 108,000 Fixed costs 50,000 g 4,000 F 54,000 g 0 54,000 g Operating income $ 34,000 $12,800 U $ 46,800 $ 7,200 U $ 54,000 $12,800 U $ 7,200 U Total flexible-budget variance Total sales-volume variance $20,000 U Total static-budget variance a $112 × 2,800 = $313,600 b $110 × 2,800 = $308,000 c $110 × 3,000 = $330,000 d Given. Unit variable cost = $229,600 ÷ 2,800 = $82 per unit e $74 × 2,800 = $207,200 f $74 × 3,000 = $222,000 g Given 2. Computing the variances directly: * static budget variance for operating income = actual OI – static budget OI =
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

sol_Ch7 - Solutions for exercises on slides 16, 17 of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online