1. Check It Off Printers, Inc., produces luxury checkbooks with three checks and stubs per page....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Check It Off Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September 2017 included these data: (Click the icon to view the operating budget and actual results.) The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. As the company's management accountant, you have been asked to provide explanations for the disappointing September results. Check It Off develops its flexible budget on the basis of budgeted per-output-unit revenue and per-output-unit variable costs without detailed analysis of budgeted inputs. Read the requirements?. Requirement 1. Prepare a static-budget-based variance analysis of the September performance. Begin with the actual results, then compute the static budget and the static-budget variances. Label each variance as favorable or unfavorable. (Enter an operating loss with a minus sign or parentheses.) Actual Static-Budget Static Results Variances Budget Units sold (1) Revenues (2) Variable costs Contribution margin (3) Fixed costs (4) Operating income (loss) (5) (6) Requirement 2. Prepare a flexible-budget-based variance analysis of the September performance. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Enter operating losses with a minus sign or parentheses.) Sales-Volume Varlances Static Actual Flexible-Budget Flexible Results Variances Budget Budget (7) (13) Units sold Revenues (8) (14) Variable costs Contribution margin (9) (15) Fixed costs (10) (16) Operating income (loss) (11) (17 (12) (18 Requirement 3. Why might Check It Off find the flexible-budget-based variance analysis more informative than the static-budget-based variance analysis? The flexible-budget (19) variance that arose because sales price and costs were either higher or lower than expected, as shown in the the static-budget variance. This allows the managers to see the portion of the (20) column, and the portion of the variance that arose because the sales volume was different than exxpected, as shown in the (21) column. The primary reason for the (22) static-budget variance is the (23). in unit volume. One explanation for this change is the (24). actual selling price from the budgeted price. Variable costs (25) relative to the flexbile budget, which could be due to (26) management or using (27) quality materials. 1: Data Table The budgeted amounts for September 2017 were: Number of checkbooks 13,000 Selling price per book %24 23 Variable cost per book 6 Fixed costs for the month 150,000 The actual results for September 2017 were as follows: Number of checkbooks produced and sold 10,400 Average selling price per book 25 Variable cost per book Fixed costs for the month 156,500 2: Requirements 1. Prepare a static-budget-based variance analysis of the September performance. 2 Prepare a flexible-budget-based variance analysis of the September performance. 3. Why might Check It Off find the flexible-budget-based variance analysis more informative than the statio-budget-based variance analysis? Explain your answer. (1) O OF OU (2) O OF OU (3) O OF (4) O OF OU (5) O OF OU (6) O OF OU (7) O OF OU (8) OF OU (9) O OF OU (10) O (11) O OF Ou OF OU (12) O OF OU (13) O OF OU (14) O OF Ou (15) O OF OU (16) O OF (17) O (18) O OF OU (19) O breaks down OF OU (20) O fiexible-budget variance O sales volume variance O takes a high-level look at (21) O lexible-budget variance O sales-volume variance (22) O favorable O unfavorable (23) O increase (24) O increase O decrease decrease (25) increased (26) O efficient O inefficient (27) O higher O decreased lower 1. Check It Off Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September 2017 included these data: (Click the icon to view the operating budget and actual results.) The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. As the company's management accountant, you have been asked to provide explanations for the disappointing September results. Check It Off develops its flexible budget on the basis of budgeted per-output-unit revenue and per-output-unit variable costs without detailed analysis of budgeted inputs. Read the requirements?. Requirement 1. Prepare a static-budget-based variance analysis of the September performance. Begin with the actual results, then compute the static budget and the static-budget variances. Label each variance as favorable or unfavorable. (Enter an operating loss with a minus sign or parentheses.) Actual Static-Budget Static Results Variances Budget Units sold (1) Revenues (2) Variable costs Contribution margin (3) Fixed costs (4) Operating income (loss) (5) (6) Requirement 2. Prepare a flexible-budget-based variance analysis of the September performance. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Enter operating losses with a minus sign or parentheses.) Sales-Volume Varlances Static Actual Flexible-Budget Flexible Results Variances Budget Budget (7) (13) Units sold Revenues (8) (14) Variable costs Contribution margin (9) (15) Fixed costs (10) (16) Operating income (loss) (11) (17 (12) (18 Requirement 3. Why might Check It Off find the flexible-budget-based variance analysis more informative than the static-budget-based variance analysis? The flexible-budget (19) variance that arose because sales price and costs were either higher or lower than expected, as shown in the the static-budget variance. This allows the managers to see the portion of the (20) column, and the portion of the variance that arose because the sales volume was different than exxpected, as shown in the (21) column. The primary reason for the (22) static-budget variance is the (23). in unit volume. One explanation for this change is the (24). actual selling price from the budgeted price. Variable costs (25) relative to the flexbile budget, which could be due to (26) management or using (27) quality materials. 1: Data Table The budgeted amounts for September 2017 were: Number of checkbooks 13,000 Selling price per book %24 23 Variable cost per book 6 Fixed costs for the month 150,000 The actual results for September 2017 were as follows: Number of checkbooks produced and sold 10,400 Average selling price per book 25 Variable cost per book Fixed costs for the month 156,500 2: Requirements 1. Prepare a static-budget-based variance analysis of the September performance. 2 Prepare a flexible-budget-based variance analysis of the September performance. 3. Why might Check It Off find the flexible-budget-based variance analysis more informative than the statio-budget-based variance analysis? Explain your answer. (1) O OF OU (2) O OF OU (3) O OF (4) O OF OU (5) O OF OU (6) O OF OU (7) O OF OU (8) OF OU (9) O OF OU (10) O (11) O OF Ou OF OU (12) O OF OU (13) O OF OU (14) O OF Ou (15) O OF OU (16) O OF (17) O (18) O OF OU (19) O breaks down OF OU (20) O fiexible-budget variance O sales volume variance O takes a high-level look at (21) O lexible-budget variance O sales-volume variance (22) O favorable O unfavorable (23) O increase (24) O increase O decrease decrease (25) increased (26) O efficient O inefficient (27) O higher O decreased lower
Expert Answer:
Answer rating: 100% (QA)
1 Actual results Static budget variance Static budget Units sold 10400 2600 U 13... View the full answer
Related Book For
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger
Posted Date:
Students also viewed these accounting questions
-
Is the p50 higher or lower than normal in (a) Hemoglobin Yakima and (b) Hemoglobin Kansas? Explain.
-
Will U.S. interest rates be higher or lower than Japanese interest rates and will interest rate parity hold? Why or why not? Suppose that the inflation rate is lower in Japan than it is in the United...
-
The same company finds the price-demand relation can be modelled by x = 20- Find (a) elasticity of demand; (b) the elasticity when price is $10; (c) if we increase the price from $10 to a higher...
-
Quality Air Conditioning manufactures three home air conditioners: an economy model, a standard model, and a deluxe model. The profits per unit are $63, $95, and $135, respectively. The production...
-
In your opinion, how compatible are these approaches? Why? What evidence is there in the Dupont story for your answer? As a change manager, to what extent could you utilize insights from each...
-
The Claude gas liquefaction process employs the \( \qquad \) for producing cooling effect (a) Isenthalpic expansion of gas (b) Isentropic expansion of gas (c) Isochoric expansion of gas (d) Isobaric...
-
Brad Poison, P.A., collected cash on account from a client for whom the business had provided delivery services one month earlier. Requirements 1. Why did the business fail to record revenue when it...
-
New employees at Sun Microsystems begin their orientation sessions after being hired with a computer game. It is part of an attempt to integrate new people, improve the image of the company, get...
-
Research can be described as a systematic and organized effort to investigate a specific problem that needs a solution. Below are types of research need to be considered before starting research....
-
Ken (birthdate July 1, 1987) and Amy (birthdate July 4, 1989) Booth have brought you the following information regarding their income, expenses, and withholding for the year. They are unsure which of...
-
James has been employed by ABC Co. Ltd, drawing an annual salary of $120000, paid at the end of each year. He plans to work for five years before retiring. He buys a new home with mortgage repayments...
-
At an unregulated theme park, your 70 kg friend goes down a frictionless slide of height 10 m, and then they are stopped at the bottom by a horizontal spring with a spring constant of 200 N/m a. If...
-
Explain the role of policy in addressing the injustice in community health facilities.?
-
Problem 1: For row (e) in the table below, find the followings: 1- Physical parameters (known parameters): 2- Varying parameters (Unknown parameters): 3- Vector loop: 4- Real Equation: 5- Imaginary...
-
A bond with 10 years left to maturity currently sells for 105% of par value. If the bond makes a $50 annual coupon payment, then the bond must have a YTM less than what percentage rate?
-
Category Land Land improvements Buildings Plant Asset $ 165,000 and Amortization $ 1,000,000 219,251 Equipment 625,000 307,500 Automobiles and trucks 162,000 90,325 Leasehold improvements 196,000...
-
What are the distinguishing characteristics of transformational delegation, and how does this approach differ from traditional top-down delegation models in driving innovation and organizational...
-
Write a paper by answer the following question: Should Recycling Be Mandatory?
-
The following six months of data were collected on maintenance cost and the number of machine hours in a factory: Select the correct set of high and low months.
-
What are stock-out costs?
-
Groomer Company provided the following income statement for last year: Sales ...................$1,400,000 Cost of goods sold .................550,000 Gross margin ................$ 850,000 Operating...
-
List each of the six branches of AI and briefly explain each one.
-
What are the three components of an Expert System (ES) program? Explain what each component does.
-
When training a machine learning application, developers can use one of three different approaches: supervised learning, unsupervised learning, and reinforcement learning. Describe each strategy and...
Study smarter with the SolutionInn App