Question: Determining sales and variable cost volume variances Required Use the information provided in Exercise 8-3B. a. Determine the sales and variable cost volume variances. b.

Determining sales and variable cost volume variances

Required

Use the information provided in Exercise 8-3B.

a. Determine the sales and variable cost volume variances.

b. Classify the variances as favorable or unfavorable.

c. Comment on the usefulness of the variances with respect to performance evaluation and identify the member of the management team most likely to be responsible for these variances.

d. Determine the amounts of fixed cost that will appear in the flexible budget.

e. Determine the fixed cost per unit based on planned activity and the fixed cost per unit based on actual activity. Assuming Clyde uses information in the master budget to price its product, explain how the fixed cost volume variance could affect the company’s profitability.

Step by Step Solution

★★★★★

3.47 Rating (167 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Master Budget 18000 Units Flexible Budget 19000 Units a b Volume Variances Sales 360000 380000 20000F Variable manufacturing 216000 228000 12000 U c Since the per unit sales price and per unit variable manufacturing costs are the same for both the master and flexible budgets the activity variances are solely attributable to the fact that sales volume was 1000 units more than planned The favorable 20000 sales volume variance suggests that increased sales are beneficial However Clyde needs more information before drawing this conclusion The increase in sales may have resulted from reducing the actual sales price which could produce negative consequences The unfavorable 12000 variable cost volume variance is misleading The total amount of variable costs is expected to increase when volume increases This variance is expected and not a bad thing Upperlevel marketing managers are normally responsible for the sales and variable cost volume variances d The amount of fixed costs appearing in the flexible budget is 20000 for manufacturing costs and 18000 for fixed selling and administrative costs The fixed costs in both the master and flexible budgets are estimates Fixed costs are estimated to be the same regardless of the volume of production and sales e Master Budget Flexible Budget Fixed manufacturing 20000 20000 ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

67-B-M-A-P-E (53).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Determining sales and variable cost volume variances Required Use the information provided in Exercise 15-3. a. Determine the sales and variable cost volume variances. b. Classify the variances as...

Determining sales and variable cost volume variances Todhunter Publications established the following standard price and costs for a hardcover picture book that the company produces. Todhunter...

Determining sales and variable cost volume variances Vlascenko Food Corporation developed the following standard price and costs for a refrigerated TV dinner that the company produces. Vlascenko...

To answer exercise 8-4A we need the infromation provided in 8-1A. Please answer 8-4A -3 Exercise 8-4A Determining sales and variable cost volume variances Required Use the information provided in...

Need 8-4A answered. Needed 8-1A to answer 8-4A. Can someone answer A-E? Thank you! -3 Exercise 8-4A Determining sales and variable cost volume variances Required Use the information provided in...

Answer fully thanks Exercise 8-4B Determining sales and variable cost volume variances Required Use the information provided in Exercise 8-1B. a. Determine the sales and variable cost volume...

2 Exercise 8-4A (Algo) Determining sales and variable cost volume variances LO 8-3 5 oints Walton Manufacturing Company established the following standard price and cost data. Sales price Variable...

Exercise 8-4A (Algo) Determining sales and variable cost volume variances LO 8-3 Jordan Manufacturing Company established the following standard price and cost data. Jordan planned to produce and...

Exercise 8-4A (Algo) Determining sales and variable cost volume variances LO 8-3 Walton Manufacturing Company established the following standard price and cost data, Bales price Variable...

Exercise 8 - 4 A ( Algo ) Determining sales and variable cost volume variances LO 8 - 3 Stuart Manufacturing Company established the following standard price and cost data. { : [ $ 8 . 3 0 " per unit...

What is hyperinflation, and what are the consequences for translating foreign financial statements?

The global pandemic was a struggle for developed and developing economies alike. Every economy was grappling with the trade-off of saving lives or saving livelihoods. As businesses closed their...

14.10 appreciate new technologies and how they may impact the future of accounting.

Jaffa Company prepared its annual financial statements dated December 31, 2014. The company applies the FIFO inventory costing method; however, the company neglected to apply LCM to the ending...

a) What is the null hypothesis tested for the coefficient of Run Time in the regression of Exercise 3? b) What is the t-statistic corresponding to this test? c) Why is this t-statistic negative? d)...

For the movies regression, here is a histogram of the residuals. What does it tell us about these Assumptions and Conditions? a) Linearity condition b) Nearly Normal condition c) Equal Spread...

A middle manager at an entertainment company, upon seeing the analysis of Exercise 3, concludes that longer movies make less money. He argues that his company's films should all be cut by 30 minutes...

On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondels preferred stock and $3,960,000 for...

Costing is the technique and process of ascertaining cost. It has the important objective of ascertaining the cost of goods and services being produced. Explain.

Preparing budgets with multiple products Silva Enterprises, Inc., has two products, palm-size computers and programmable calculators. Jean Zeigler, the chief executive officer, is working with her...

Preparing a cash budget Pope Company has budgeted the following cash flows: Pope had a $36,000 cash balance on April 1. The company desires to maintain a $60,000 cash cushion before paying interest....

Preparing a schedule of cash payments for selling and administrative expenses Antoins Travel Services has prepared its selling and administrative expenses budget for the next quarter. It pays all...

Assume the following information: Sandy has $100,000 to conduct triangular arbitrage. What will be Sandy's profit from implementing this strategy? $1900.74 $1,920.00. $6,629.85. $5,820.00

Complete the Balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Total Assets Turnover: 1.5 Gross Profit margin on sales: (Sales...

Sybil, age 40 is single and supports her dependent parents who live with her and also supports her grandfather who is in a nursing home. She has an AGI of $80,000 and itemized deductions of $8,000