Review the following schedule: (A) Sales - units Sales - revenue Variable expenses COGS Commissions Contrib....

 

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Review the following schedule: (A) Sales - units Sales - revenue Variable expenses COGS Commissions Contrib. margin Fixed expenses Salaries Other operating Depreciation Inc. from operations Interest expense Inc. before taxes Income taxes Master budget Net income 20,000 $600,000 (50,000) (40,000) (10,000) (100,000) (B) 134,000 (20,000) Volume variances (360,000) (36,000) (6,000) (600) (366,000) (36,600) 234,000 23,400 (C-A) 2,000 $60,000 (10,000) 0 0 (10,000) 13,400 0 (C) Flexible budget (396,000) (6,600) (402,600) 257,400 22,000 $660,000 $(22,000) (60,000) (40,000) (10,000) (110,000) (D) Flexible budget variances (E-C) 147,400 (20,000) 0 (18,700) (6,160) (24,860) (46,860) (5,000) (10,000) 0 (15,000) (61,680) (5,000) 127,400 (66,860) (25,480) 10,345 $101,920 $(56,515) (E) Actual results 22,000 $638,000 (414,700) (12,760) (427,460) 210,540 114,000 13,400 (22,800) (2,680) $91,200 $10,720 Required: Provide plausible explanations for the volume and flexible budget variances. (65,000) (50,000) (10,000) (125,000) 85,540 (25,000) 60,540 (15,135) $45,405 Review the following schedule: (A) Sales - units Sales - revenue Variable expenses COGS Commissions Contrib. margin Fixed expenses Salaries Other operating Depreciation Inc. from operations Interest expense Inc. before taxes Income taxes Master budget Net income 20,000 $600,000 (50,000) (40,000) (10,000) (100,000) (B) 134,000 (20,000) Volume variances (360,000) (36,000) (6,000) (600) (366,000) (36,600) 234,000 23,400 (C-A) 2,000 $60,000 (10,000) 0 0 (10,000) 13,400 0 (C) Flexible budget (396,000) (6,600) (402,600) 257,400 22,000 $660,000 $(22,000) (60,000) (40,000) (10,000) (110,000) (D) Flexible budget variances (E-C) 147,400 (20,000) 0 (18,700) (6,160) (24,860) (46,860) (5,000) (10,000) 0 (15,000) (61,680) (5,000) 127,400 (66,860) (25,480) 10,345 $101,920 $(56,515) (E) Actual results 22,000 $638,000 (414,700) (12,760) (427,460) 210,540 114,000 13,400 (22,800) (2,680) $91,200 $10,720 Required: Provide plausible explanations for the volume and flexible budget variances. (65,000) (50,000) (10,000) (125,000) 85,540 (25,000) 60,540 (15,135) $45,405

Answer rating: 100% (QA)

Volume variance The volume variance is positive which means that the company sold more units than we... View the full answer