Classics, Ltd., details cars. Classics wants to compare this quarter’s results with those for last quarter, which is believed to be typical for operations. Assume that the following information is provided. Last Quarter This Quarter Number of detailings 440 523 Revenues $ 72,160 $ 68,800 Variable costs 27,920 31,920 Contribution margin $ 44,240 $ 36,880 Required: a. Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as “actual.”) b. What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.’s contribution margin?
Classics, Ltd., details cars. Classics wants to compare this quarter’s results with those for last quarter, which is believed to be typical for operations. Assume that the following information is provided. Last Quarter This Quarter Number of detailings 440 523 Revenues $ 72,160 $ 68,800 Variable costs 27,920 31,920 Contribution margin $ 44,240 $ 36,880 Required: a. Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as “actual.”) b. What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.’s contribution margin?
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter23: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 4MAD: Direct labor time variance Maywood City Police uses variance analysis to monitor police staffing....
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Classics, Ltd., details cars. Classics wants to compare this quarter’s results with those for last quarter, which is believed to be typical for operations. Assume that the following information is provided.
Last Quarter | This Quarter | |||
Number of detailings | 440 | 523 | ||
Revenues | $ | 72,160 | $ | 68,800 |
Variable costs | 27,920 | 31,920 | ||
Contribution margin | $ | 44,240 | $ | 36,880 |
Required:
a. Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the
b. What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.’s contribution margin?
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