# SP21 - \$9,000 F Correct Correct Correct Part 2 Analyze and...

This preview shows page 1. Sign up to view the full content.

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 21-04A PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2013 Flexible Actual Budget Results Variances Sales \$3,600,000 \$3,648,000 \$48,000 F Variable costs: Direct materials 1,170,000 1,185,000 15,000 U Direct labor 270,000 278,000 8,000 U Machinery repairs 72,000 63,000 9,000 F Utilities 54,000 53,000 1,000 F Packaging 90,000 87,500 2,500 F Shipping 126,000 118,500 7,500 F Total variable costs 1,782,000 1,785,000 3,000 U Contribution margin 1,818,000 1,863,000 45,000 F Fixed costs: Depreciation - plant equipment 300,000 300,000 - Utilities 150,000 147,500 2,500 F Plant management salaries 200,000 210,000 10,000 U Sales salary 250,000 268,000 18,000 U Advertising expense 125,000 132,000 7,000 U Salaries 241,000 241,000 - Entertainment expense 90,000 93,500 3,500 U Total fixed costs 1,356,000 1,392,000 36,000 U Income from operations \$462,000 \$471,000
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: \$9,000 F Correct! Correct! Correct! Part 2: Analyze and interpret both the (a) sales variance and (b) direct materials variance. (a) Analysis of sales variance: Total Per unit Budgeted sales \$3,600,000 \$200.00 Actual sales 3,648,000 202.67 Sales variance \$48,000 \$2.67 Correct! Correct! Interpretation: The sales variance is favorable because the actual price was higher than planned. (b) Analysis of direct materials variance: Total Per unit Budgeted materials \$1,170,000 \$65.00 Actual materials used 1,185,000 65.83 Direct materials variance \$15,000 \$0.83 Correct! Correct! Interpretation: The direct materials variance is unfavorable for two possible reasons. (1) The quantity of materials used may have been more than the quantity budgeted, and/or (2) the amount paid for the materials might have been more than the budgeted purchase price....
View Full Document

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern