What is the total gross profit variance? Blue Co. has the following variances gathered from its reports:Analysis2,000 Unfavorable3,500 Unfavorable1,250 UnfavorableType of VarianceSales Price Variance, 3-waySales Volume Variance, 4-wayAmountVolume Variance, 3-wayCost Price Variance, 4-way3,000Favorable

Solution: Total gross profit variance = Favorable cost price variance, 4 way - Unfavorable volume…

Answered: Blue Co. has the following variances…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 22E

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Recompute the variances from the second Acme Inc. exercise using $0.0725 as the standard cost of the material and $14 as the standard labor cost per hour. How has your explanation of the variances changed?
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Can you help me interpret these results i)Revenue Variance, Price, and Volume Variance Revenue variance = Actual revenues – Static revenues = $2,200,000 - $1,9800,000 = $220,000 Price variance = Actual revenues – Flexible revenues =$2,2000,000 - $2,200,000 =$0 Volume variance = Flexible revenues – Static revenues =$2,200,000 - $1,980,000 = $220,000 ii) Cost Variance, Volume Variance and Management Variance Cost variance = Static cost - Actual cost =$1,350,000 -$1,625,000 = $-275,000 Volume = Static cost – Flexible costs = $1,350,000 - =$1,475,000 = $-125,000 Management variance = Flexible cost- Actual cost =$2,200,000 - 1,625,000 =$575,000 iii) Profit Variance Profit Variance= Actual Profit - Static Profit = 225,000 - 130,000 = 95,000 Revenue Variance = Actual Revenue - Static Revenue = 2, 200,000 - 1,980,000 = 220,000 Cost Variance = Static Cost - Actual Costs = 1,850,000 - 1,975,000 = (125,000) Can you help me interpret these results
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Blue Co. has the following variances gathered from its reports: Analysis 2,000 Unfavorable 3,500 Unfavorable 1,250 Unfavorable Type of Variance Amount Sales Price Variance, 3-way Sales Volume Variance, 4-way Volume Variance, 3-way Cost Price Variance, 4-way 3,000 Favorable