Use the standard price and cost data provided in Exercise 15-3. Assume that the actual sales price is $7.65 per unit and that the actual variable cost is $4.25 per unit. The actual fixed manufacturing cost is $2,850, and the actual selling and administrative expenses are $1,025. Required a. Determine the flexible budget variances. b. Classify the variances as favorable
Use the standard price and cost data provided in Exercise 15-3. Assume that the actual sales price is $7.65 per unit and that the actual variable cost is $4.25 per unit. The actual fixed manufacturing cost is $2,850, and the actual selling and administrative expenses are $1,025.
Required
a. Determine the flexible budget variances.
b. Classify the variances as favorable (F) or unfavorable (U).
c. Provide another name for the fixed cost flexible budget variance.
d. Comment on the usefulness of the variances with respect to performance evaluation and identify the member(s) of the management team who is (are) most likely to be responsible for these variances.
Required
a. Determine the flexible budget variances.
b. Classify the variances as favorable (F) or unfavorable (U).
c. Provide another name for the fixed cost flexible budget variance.
d. Comment on the usefulness of the variances with respect to performance evaluation and identify the member(s) of the management team who is (are) most likely to be responsible for these variances.
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Answer
a. and b. Flexible Budget 2,200 Units Actual Price/Cost at 2,200 Units Flexible Budget Variances Sal…View the full answer
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Survey of Accounting
3rd Edition
Authors: Thomas P. Edmonds, Frances M. McNair, Philip R. Olds, Bor Yi
ISBN: 978-0078110856