The master budget at Western Company last period called for sales of 226,700 units at $10.70...

Transcribed Image Text:

The master budget at Western Company last period called for sales of 226,700 units at $10.70 each. The costs were estimated to be $3.92 variable per unit and $226,700 fixed. During the period, actual production and actual sales were 231,700 units. The selling price was $10.80 per unit. Variable costs were $6.20 per unit. Actual fixed costs were $226,700. Required: Prepare a profit variance analysis. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) WESTERN COMPANY Profit Variance Analysis Actual Manufacturing Budget Variances Sales Price Variance Flexible Budget Sales Activity Variance Master Budget $ $ Sales revenue $2,502,360 F $53,500 F 2,479,190 2,425,690 Less: Variable costs 1,436,540 908,264 19,600 U 888,664 $ $ Contribution margin $1,065,820 U F $33,900 F 1,570,926 1,537,026 Less: Fixed costs 226,700 226,700 226,700 $ $ Operating profits $ 839,120 U F $33,900 F 1,344,226 1,310,326 The master budget at Western Company last period called for sales of 226,700 units at $10.70 each. The costs were estimated to be $3.92 variable per unit and $226,700 fixed. During the period, actual production and actual sales were 231,700 units. The selling price was $10.80 per unit. Variable costs were $6.20 per unit. Actual fixed costs were $226,700. Required: Prepare a profit variance analysis. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) WESTERN COMPANY Profit Variance Analysis Actual Manufacturing Budget Variances Sales Price Variance Flexible Budget Sales Activity Variance Master Budget $ $ Sales revenue $2,502,360 F $53,500 F 2,479,190 2,425,690 Less: Variable costs 1,436,540 908,264 19,600 U 888,664 $ $ Contribution margin $1,065,820 U F $33,900 F 1,570,926 1,537,026 Less: Fixed costs 226,700 226,700 226,700 $ $ Operating profits $ 839,120 U F $33,900 F 1,344,226 1,310,326

Answer rating: 100% (QA)

Answer To prepare a profit variance analysis for Western Company we can use the following steps 1 Calculate the actual sales revenue Actual Sales Reve... View the full answer