Question: Question Accounting Question! AllTalk Technologies manufactures capacitors for cellular base stations and other communications applications. The companys July 2014 flexible budget shows output levels of
Question
Accounting Question!
AllTalk Technologies manufactures capacitors for cellular base stations and other communications applications. The companys July 2014 flexible budget shows output levels of 6,500, 8,000, and 10,000 units. The static budget was based on expected sales of 8,000 units.
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The company sold 10,000 units during July, and its actual operating income was as follows:
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Requirements 1. Prepare a flexible budget performance report for July. 2. What was the effect on AllTalks operating income of selling 2,000 units more than the static budget level of sales? 3. What is AllTalks static budget variance? 4. Explain why the flexible budget performance report provides more useful information to AllTalks managers than the simple static budget variance. What insights can AllTalks managers draw from this performancereport?
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