Exercise 8-5A (Algo) Determining flexible budget variances LO 8-4 Perez Manufacturing Company established the following standard price and cost data: Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost Perez planned to produce and sell 2,800 units. Actual production and sales amounted to 3,000 units. Assume that the actual sales price is $7.70 per unit and that the actual variable cost is $3.80 per unit. The actual fixed manufacturing cost is $2,200, and the actual selling and administrative costs are $725. Required a.&b. Determine the flexible budget variances and classify the effect of each variance by selecting favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). Sales Variable manufacturing Contribution margin $ 8.10 per unit $ 3.50 per unit $ 2,600 total $ 700 total Fixed manufacturing Fixed selling and administrative cost Net income (loss) Flexible Budget Variances
Exercise 8-5A (Algo) Determining flexible budget variances LO 8-4 Perez Manufacturing Company established the following standard price and cost data: Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost Perez planned to produce and sell 2,800 units. Actual production and sales amounted to 3,000 units. Assume that the actual sales price is $7.70 per unit and that the actual variable cost is $3.80 per unit. The actual fixed manufacturing cost is $2,200, and the actual selling and administrative costs are $725. Required a.&b. Determine the flexible budget variances and classify the effect of each variance by selecting favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). Sales Variable manufacturing Contribution margin $ 8.10 per unit $ 3.50 per unit $ 2,600 total $ 700 total Fixed manufacturing Fixed selling and administrative cost Net income (loss) Flexible Budget Variances
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 16E: Refer to the data in Exercise 9.15. Required: 1. Compute overhead variances using a two-variance...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Exercise 8-5A (Algo) Determining flexible budget variances LO 8-4
Perez Manufacturing Company established the following standard price and cost data:
Sales price
Variable manufacturing cost
Fixed manufacturing cost
Fixed selling and administrative cost
Perez planned to produce and sell 2,800 units. Actual production and sales amounted to 3,000 units.
Assume that the actual sales price is $7.70 per unit and that the actual variable cost is $3.80 per unit. The actual fixed manufacturing
cost is $2,200, and the actual selling and administrative costs are $725.
Required
a.&b. Determine the flexible budget variances and classify the effect of each variance by selecting favorable (F) or unfavorable (U).
Note: Select "None" if there is no effect (i.e., zero variance).
Sales
Variable manufacturing
Contribution margin
$ 8.10 per unit
$ 3.50 per unit
$ 2,600 total
$ 700 total
Fixed manufacturing
Fixed selling and administrative cost
Net income (loss)
Flexible Budget
Variances
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