Performance Evaluation

Exercise $8-5$B Determining flexible budget variances

LO $8-4$

Use the standard price and cost data provided in Exercise $8-1$B$.$ Assume the actual sales price was $$14\mathrm{.}75$ per unit and the actual variable cost was $$6\mathrm{.}80$ per unit. The actual fixed manufacturing cost was $$33,500,$ and the actual selling and administrative expenses were $$23,500.$

Required

a$.$ Determine the flexible budget variances.

b$.$ Classify the variances as favorable or unfavorable.

c$.$ Provide another name for the fixed cost flexible budget variances.

d$.$ Comment on the usefulness of the variances with respect to performance evaluation and identify the member$($s$)$ of the management team that is $($are$)$ most likely to be responsible for these variances.