Question: NOTE: I only need help with the Sales Volume Variance @ the bottom. As the new accountant for Cohen & Co., you have been asked
NOTE: I only need help with the Sales Volume Variance @ the bottom.
As the new accountant for Cohen & Co., you have been asked to provide a succinct analysis of financial performance for the year just ended. You obtain the following information that pertains to the companys sole product:
|
| Actual | Master (Static) Budget |
| Units Sold | 35,000 | 40,000 |
| Sales | $ 397,000 | $ 467,000 |
| Variable cost | $ 227,000 | $ 287,000 |
| Fixed costs | $ 164,500 | $152,000 |
What was the actual operating income for the period?
| Actual operating income | $ 5,500 |
What was the companys master budget operating income for the period?
| Master operating Income | $ 28,000 |
What was the total master (static) budget variance, in terms of operating income, for the period? Is this variance favorable or unfavorable?
| Total Master budget Variance | $ 22,500 | Unfavorable |
From the information given earlier, decompose the total master (static) budget variance by determining the amounts for both the total flexible-budget variance and sales volume variance. Are these variances favorable or unfavorable? (Leave no cells blank - be certain to enter "0" wherever required. If a variance has no amount, select "None" in the corresponding dropdown cell.)
| Total flexible-budget variance | 0 | None |
| Sales volume variance | ??? | Unfavorable |
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts