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Demo8 - Demo Problem 8-1 Character of Variances Item Budget...

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Item Budget Actual Variance F or UF Selling and Admin. Exp. $ 29,000 $ 27,000 Sales Revenue $310,000 $325,000 Materials Price $2.00 per lb. $2.10 per lb. Cost of Goods Sold $125,000 $100,000 Materials Purchases $250,000 $265,000 Materials Usage 6,000 lbs. 5,800 lbs. Sales Price $550 each $500 each Labor Rate $8.10 per hr. $7.95 per hr. Production Volume 950 units 900 units Labor Usage $ 96,000 $ 97,000 Research and Dev. Exp. $ 22,000 $ 25,000 Demo Problem 8-1 / Character of Variances
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Demo Problem 8-1 / Character of Variances Item Budget Actual Variance F or UF Selling and Admin. Exp. $ 29,000 > $ 27,000 $ 2,000 F Sales Revenue $310,000 < $325,000 $15,000 F Materials Price $2.00 per lb. < $2.10 per lb. $.10 per lb. UF Cost of Goods Sold $125,000 > $100,000 $25,000 F Materials Purchases $250,000 < $265,000 $15,000 UF Materials Usage 6,000 lbs. > 5,800 lbs. 200 lbs. F Sales Price $550 each > $500 each $50 each UF Labor Rate $8.10 per hr. > $7.95 per hr. $.15 per hr. F Production Volume 950 units > 900 units 50 units UF Labor Usage $ 96,000 < $ 97,000 $ 1,000 UF Research and Dev. Exp. $ 22,000 < $ 25,000 $ 3,000 UF
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Price and Variable Costs Per Unit: Standard Actual Sales Price $62.00 $60.00 Direct Materials Cost 16.00 16.34 Direct Labor Cost 12.00 10.92 Overhead Cost 14.00 14.20 General, Selling, and Administrative (G,S,&A) Cost 8.00 7.00 Expected Fixed Costs: Manufacturing $120,400 $114,000 General, Selling, and Administrative 67,000 69,000 The following data apply to chairs made by the Western Chair Company: Western planned to make and sell 43,000 chairs. It actually produced and sold 44,000 chairs. Demo Problem 8-2 Sales Volume and Flexible Budget Variances Static Budget Flexible Budget Volume Variances F or UF Number of Units Sales Revenue Variable Costs Direct Material Direct Labor Overhead G,S,&A Contribution Margin Fixed Costs Manufacturing G,S,&A Net Income
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