Space Toys manufactures a popular toy rocket ship. The companys master budget and actual operating results for

Space Toys manufactures a popular toy rocket ship. The company’s master budget and actual operating results for the most recent quarter (three months) of operations are as follows:

The owner of Space Toys is alarmed that actual revenue decreased by 20% and, more importantly, that actual profit decreased by 30% compared to the master budget. Because
of these numbers, the owner is convinced that both the marketing director, who is responsible for sales, and the production manager, who is responsible for controlling costs, did not do a good job last quarter.

Required:
a. What was Space Toys’ flexible budget for the most recent quarter of operations?
b. What were Space Toys’ sales volume and sales price variances for the most recent quarter?
c. What were Space Toys’ variable cost and fixed cost variances for the most recent quarter?
d. In light of your answers to parts (b) and (c), who do you believe is to blame for Space Toys’ poor profit performance lastquarter?

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Master Budget Actual Resulls 15,000 units Rocket ship sales Revenue Variable costs 12,000 units $375,000 75,000 Contribution margin $300,000 150,000 $150,000 $300,000 4,000 $246,000 141,000 $105,000 Fixed costs Profit