Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries...

  

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Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 120,000 liters at a budgete price of $225 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials Direct labor Variable overhead is applied based on direct labor hours. The variable overhead rate is $120 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $60 per unit. All non-manufacturing costs are fixed and are budgeted at $2.2 million for the coming year. Sales revenue Less variable costs At the end of the year, the costs analyst reported that the sales activity variance for the year was $690,000 unfavorable. The following is the actual income statement (in thousands of dollars) for the year. Direct materials Direct labor Variable overhead (2 pounds @ $14) (0.5 hours @ $11) Total variable costs $28 22 Contribution margin Less fixed costs Fixed manufacturing overhead Non manufacturing costs Total fixed costs. Operating profit $25,938 2,788 1, 110 1,030 $ 1,928 $21, 010 1, 150 1, 330 $ 2, 180 $18, 530 Prepare a profit variance analysis. (Enter your answers in thousands of dollars. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Sales revenue Materials Direct labor Variable overhead Total variable costs Contribution margin Fixed costs: Manufacturing Non-manufacturing Total fixed costs Operating profits $ 25,938 2,788 1,110 1,030 $ 4,928 $ 21,010 Actual $ $ 1,150 1,330 2,480 18,530 PAYNESVILLE CORPORATION Profit Variance Analysis Manufacturing Variances ▶ Non-Manufacturing Variances Sales Price Variance $ $ FI $ $ B r your answers in thousands of dollars. Indicate the effect of each variance or unfavorable. If there is no effect, do not select either option.) $ $ $ Actual 25,938 2,788 1,110 1,030 4,928 21,010 1,150 1,330 $ 2,480 $ 18,530 PAYNESVILLE CORPORATION Profit Variance Analysis Manufacturing Variances Non-Manufacturing Variances Sales Price Variance Flexible Budget $ $ $ $ 0 0 0 0 Sales Activity Variance Master Budget $ $ $ $ 0 0 0 0 Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 120,000 liters at a budgete price of $225 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials Direct labor Variable overhead is applied based on direct labor hours. The variable overhead rate is $120 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $60 per unit. All non-manufacturing costs are fixed and are budgeted at $2.2 million for the coming year. Sales revenue Less variable costs At the end of the year, the costs analyst reported that the sales activity variance for the year was $690,000 unfavorable. The following is the actual income statement (in thousands of dollars) for the year. Direct materials Direct labor Variable overhead (2 pounds @ $14) (0.5 hours @ $11) Total variable costs $28 22 Contribution margin Less fixed costs Fixed manufacturing overhead Non manufacturing costs Total fixed costs. Operating profit $25,938 2,788 1, 110 1,030 $ 1,928 $21, 010 1, 150 1, 330 $ 2, 180 $18, 530 Prepare a profit variance analysis. (Enter your answers in thousands of dollars. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Sales revenue Materials Direct labor Variable overhead Total variable costs Contribution margin Fixed costs: Manufacturing Non-manufacturing Total fixed costs Operating profits $ 25,938 2,788 1,110 1,030 $ 4,928 $ 21,010 Actual $ $ 1,150 1,330 2,480 18,530 PAYNESVILLE CORPORATION Profit Variance Analysis Manufacturing Variances ▶ Non-Manufacturing Variances Sales Price Variance $ $ FI $ $ B r your answers in thousands of dollars. Indicate the effect of each variance or unfavorable. If there is no effect, do not select either option.) $ $ $ Actual 25,938 2,788 1,110 1,030 4,928 21,010 1,150 1,330 $ 2,480 $ 18,530 PAYNESVILLE CORPORATION Profit Variance Analysis Manufacturing Variances Non-Manufacturing Variances Sales Price Variance Flexible Budget $ $ $ $ 0 0 0 0 Sales Activity Variance Master Budget $ $ $ $ 0 0 0 0

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