Picture Maker is a freestanding photo kiosk consumers use to download their digital photos and make prints.
Question:
Paper and chemicals are variable costs, and maintenance, equipment lease, and store rent are fixed costs. If the kiosk is malfunctioning and the print quality deteriorates, Sanchez refunds the customers money and then gets his money back from Sharma when she comes by to check the paper and chemical supplies. These occasional refunds cause her variable costs per print for paper and chemicals to vary over time.
The following table reports the results from operating the kiosk at the Sanchez Drug Store last month. Budget variances are computed as the difference between actual and budgeted amounts. An unfavorable variance (U) exists when actual revenues fall short of budget or when actual expenses exceed the budget. Last month, the kiosk had a net loss of $ 23, which was $ 87 more than budgeted.
Required:
a. Prepare a schedule that shows the budget Sharma used in calculating the variances in the preceding report.
b. How many good prints were made last month at the Sanchez Drug Store kiosk?
c. Prepare a flexible budget for the Sanchez Drug Store kiosk based on a volume of 2,000prints.
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Related Book For
Accounting for Decision Making and Control
ISBN: 978-0078025747
8th edition
Authors: Jerold Zimmerman
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