1. Check It Off Printers, Inc., produces luxury checkbooks with three checks and stubs per page....

 

 

 

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1. Check It Off Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September 2017 included these data: (Click the icon to view the operating budget and actual results.) The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. As the company's management accountant, you have been asked to provide explanations for the disappointing September results. Check It Off develops its flexible budget on the basis of budgeted per-output-unit revenue and per-output-unit variable costs without detailed analysis of budgeted inputs. Read the requirements?. Requirement 1. Prepare a static-budget-based variance analysis of the September performance. Begin with the actual results, then compute the static budget and the static-budget variances. Label each variance as favorable or unfavorable. (Enter an operating loss with a minus sign or parentheses.) Actual Static-Budget Static Results Variances Budget Units sold (1) Revenues (2) Variable costs Contribution margin (3) Fixed costs (4) Operating income (loss) (5) (6) Requirement 2. Prepare a flexible-budget-based variance analysis of the September performance. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Enter operating losses with a minus sign or parentheses.) Sales-Volume Varlances Static Actual Flexible-Budget Flexible Results Variances Budget Budget (7) (13) Units sold Revenues (8) (14) Variable costs Contribution margin (9) (15) Fixed costs (10) (16) Operating income (loss) (11) (17 (12) (18 Requirement 3. Why might Check It Off find the flexible-budget-based variance analysis more informative than the static-budget-based variance analysis? The flexible-budget (19) variance that arose because sales price and costs were either higher or lower than expected, as shown in the the static-budget variance. This allows the managers to see the portion of the (20) column, and the portion of the variance that arose because the sales volume was different than exxpected, as shown in the (21) column. The primary reason for the (22) static-budget variance is the (23). in unit volume. One explanation for this change is the (24). actual selling price from the budgeted price. Variable costs (25) relative to the flexbile budget, which could be due to (26) management or using (27) quality materials. 1: Data Table The budgeted amounts for September 2017 were: Number of checkbooks 13,000 Selling price per book %24 23 Variable cost per book 6 Fixed costs for the month 150,000 The actual results for September 2017 were as follows: Number of checkbooks produced and sold 10,400 Average selling price per book 25 Variable cost per book Fixed costs for the month 156,500 2: Requirements 1. Prepare a static-budget-based variance analysis of the September performance. 2 Prepare a flexible-budget-based variance analysis of the September performance. 3. Why might Check It Off find the flexible-budget-based variance analysis more informative than the statio-budget-based variance analysis? Explain your answer. (1) O OF OU (2) O OF OU (3) O OF (4) O OF OU (5) O OF OU (6) O OF OU (7) O OF OU (8) OF OU (9) O OF OU (10) O (11) O OF Ou OF OU (12) O OF OU (13) O OF OU (14) O OF Ou (15) O OF OU (16) O OF (17) O (18) O OF OU (19) O breaks down OF OU (20) O fiexible-budget variance O sales volume variance O takes a high-level look at (21) O lexible-budget variance O sales-volume variance (22) O favorable O unfavorable (23) O increase (24) O increase O decrease decrease (25) increased (26) O efficient O inefficient (27) O higher O decreased lower 1. Check It Off Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September 2017 included these data: (Click the icon to view the operating budget and actual results.) The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. As the company's management accountant, you have been asked to provide explanations for the disappointing September results. Check It Off develops its flexible budget on the basis of budgeted per-output-unit revenue and per-output-unit variable costs without detailed analysis of budgeted inputs. Read the requirements?. Requirement 1. Prepare a static-budget-based variance analysis of the September performance. Begin with the actual results, then compute the static budget and the static-budget variances. Label each variance as favorable or unfavorable. (Enter an operating loss with a minus sign or parentheses.) Actual Static-Budget Static Results Variances Budget Units sold (1) Revenues (2) Variable costs Contribution margin (3) Fixed costs (4) Operating income (loss) (5) (6) Requirement 2. Prepare a flexible-budget-based variance analysis of the September performance. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Enter operating losses with a minus sign or parentheses.) Sales-Volume Varlances Static Actual Flexible-Budget Flexible Results Variances Budget Budget (7) (13) Units sold Revenues (8) (14) Variable costs Contribution margin (9) (15) Fixed costs (10) (16) Operating income (loss) (11) (17 (12) (18 Requirement 3. Why might Check It Off find the flexible-budget-based variance analysis more informative than the static-budget-based variance analysis? The flexible-budget (19) variance that arose because sales price and costs were either higher or lower than expected, as shown in the the static-budget variance. This allows the managers to see the portion of the (20) column, and the portion of the variance that arose because the sales volume was different than exxpected, as shown in the (21) column. The primary reason for the (22) static-budget variance is the (23). in unit volume. One explanation for this change is the (24). actual selling price from the budgeted price. Variable costs (25) relative to the flexbile budget, which could be due to (26) management or using (27) quality materials. 1: Data Table The budgeted amounts for September 2017 were: Number of checkbooks 13,000 Selling price per book %24 23 Variable cost per book 6 Fixed costs for the month 150,000 The actual results for September 2017 were as follows: Number of checkbooks produced and sold 10,400 Average selling price per book 25 Variable cost per book Fixed costs for the month 156,500 2: Requirements 1. Prepare a static-budget-based variance analysis of the September performance. 2 Prepare a flexible-budget-based variance analysis of the September performance. 3. Why might Check It Off find the flexible-budget-based variance analysis more informative than the statio-budget-based variance analysis? Explain your answer. (1) O OF OU (2) O OF OU (3) O OF (4) O OF OU (5) O OF OU (6) O OF OU (7) O OF OU (8) OF OU (9) O OF OU (10) O (11) O OF Ou OF OU (12) O OF OU (13) O OF OU (14) O OF Ou (15) O OF OU (16) O OF (17) O (18) O OF OU (19) O breaks down OF OU (20) O fiexible-budget variance O sales volume variance O takes a high-level look at (21) O lexible-budget variance O sales-volume variance (22) O favorable O unfavorable (23) O increase (24) O increase O decrease decrease (25) increased (26) O efficient O inefficient (27) O higher O decreased lower

Answer rating: 100% (QA)

1 Actual results Static budget variance Static budget Units sold 10400 2600 U 13... View the full answer