Compare the flexible and master (static) budgets and prepare a schedule showing the sales volume variance. Compare the actual results and the flexible budget, and prepare a schedule showing the flexible budget variance. Subdivide the flexible budget variances into the appropriate price (rate or spending) and efficiency (usage or quantity) variances for materials, labor, and variable overhead. 

b. Compute the bonuses earned in fiscal 1998, if any, by David Hall of the purchasing department, Rita Smith of the marketing department, and Bill Wilford of the production department. 

2. a. You will be assisting in the investigation of certain variances. Using the information provided, formulate some likely explanations for the observed variances. 

b. Comment on the advantages and disadvantages of the incentive compensation plan as it applies to department heads. What is the appropriate role of the budget in performance evaluation? What modifications to the incentive plan would you recommend? Why? 

3. (Optional) Suppose that Berkshire Toy Company adopts a balanced scorecard (BSC) to measure its performance. What performance dimensions are typically included in a BSC? What specific performance measures (indicators) might be included in the scorecard?

  

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BERKSHIRE TOY CASE GIVEN INFORMATION actual revenues retail selling price internet selling price wholesale selling price retail sales volume internet sales volume wholesales sales volume total sales volume acrylic fabric. acrylic eyes plastic joints polyster filling woven label designer box accessories sewing stuffing and cutting assembly dressing and packaging total hours variable overhead fixed overhead variable selling fixed selling administrative expenses - 49 42 32 174965 105429 45162 325556 7910 661248 1937023 344165 328447 315854 325556 189211 104117 121054 34615 448997 budgeted TABLE 3 actual quantity actual price 448997 325556 49 42 32 238000 42000 280000 32.4174 0.19 0.127 1.31 0.05 0.22 0.20277 8.17 8.17 8.17 8.17 3.843377 658897 5.712055683 5023192 1123739 actual mix 53.74% 32.38% 13.87% TABLE 2 standard quantity standard price input 0.02381 35 per bolt 0.19 per eye 0.14 per joint 2 5 0.9 1 1 oooo 1 0.5 533 0.3 0.3 0.1 336000 budgeted mix 1.2 1.2 1 85.00% 0.00% 15.00% 1.45 per pound 0.05 each 0.24 each 0.12 each 8 hour 8 hour 8 hour 8 hour 3.114 per DLH 1.97 4.351 15.94 4.01 bud. production 280,000 $ 69 69 $ $ 69 69 1,046,304 $ 661,920 4,463,000 1,124,000 actual 325,556 1,725,665 1859594 BERKSHIRE TOY CASE GIVEN INFORMATION actual revenues retail selling price internet selling price wholesale selling price retail sales volume internet sales volume wholesales sales volume total sales volume acrylic fabric. acrylic eyes plastic joints polyster filling woven label designer box accessories sewing stuffing and cutting assembly dressing and packaging total hours variable overhead fixed overhead variable selling fixed selling administrative expenses - 49 42 32 174965 105429 45162 325556 7910 661248 1937023 344165 328447 315854 325556 189211 104117 121054 34615 448997 budgeted TABLE 3 actual quantity actual price 448997 325556 49 42 32 238000 42000 280000 32.4174 0.19 0.127 1.31 0.05 0.22 0.20277 8.17 8.17 8.17 8.17 3.843377 658897 5.712055683 5023192 1123739 actual mix 53.74% 32.38% 13.87% TABLE 2 standard quantity standard price input 0.02381 35 per bolt 0.19 per eye 0.14 per joint 2 5 0.9 1 1 oooo 1 0.5 533 0.3 0.3 0.1 336000 budgeted mix 1.2 1.2 1 85.00% 0.00% 15.00% 1.45 per pound 0.05 each 0.24 each 0.12 each 8 hour 8 hour 8 hour 8 hour 3.114 per DLH 1.97 4.351 15.94 4.01 bud. production 280,000 $ 69 69 $ $ 69 69 1,046,304 $ 661,920 4,463,000 1,124,000 actual 325,556 1,725,665 1859594

Answer rating: 100% (QA)

ANSWER 1 A On the other hand a static budget is a financial plan without any scope for change For example if a company decides that it will supply 10000 units of a product per month and no more or les... View the full answer