Domestic Jay Banning, CEO and a major stockholder of Banning Incorporated, was unhappy with its operating results for the past year. Thecompany manufactures two environmentally friendly industrial caliber cleaning machines used primarily in automobile repair shops,gas stations, and auto dealerships. The master budget and operating results for the year (000s omitted except for the selling price perunit) follow:SalesVariable costContributionFixed costOperating incomeUnits soldUnit selling priceCM Flexible budget varianceCM Sales volume varianceCM Sales quantity varianceCM Sales mix varianceActual$$$T10$ 132,00061,700$ 70,30010,000$ 60,3001,200540$58,69528,000$ 30,69510,000$ 20,6951,505T107,443Favorable7,857 Favorable25,586 FavorableUnfavorableRequired:1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin salesquantity variance, and contribution margin sales mix variance for each product and for the firm. (Do not round Intermediatecalculations and round your final answers to the nearest whole dollar amount.)4040✓ S✓S $BudgetST10$ 105,00050,000$ 55,00010,000$ 45,000$ 100S40$ 45,00025,000$20,00010,000$ 10,000$ 40Answer is not complete.S40Favorable3,9396,756 Favorable10,966 X FavorableFavorable3333✓ SS✓S $Total11,382✔ Favorable14,613 Favorable36,552FavorableUnfavorable****

Flexible Budget : > Flexible budget is a budget that can be incorporated for any level of…

Required: 1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and contribution margin sales mix variance for each product and for the firm. (Do not round Intermediate calculations and round your final answers to the nearest whole dollar amount.)

Required: 1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and contribution margin sales mix variance for each product and for the firm. (Do not round Intermediate calculations and round your final answers to the nearest whole dollar amount.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 31P: Haysbert Company provides management services for apartments and rental units. In general, Haysbert...

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Cassara, Inc., had the following quality costs for the years ended December 31, 20X1 and 20X2: At the end of 20X1, management decided to increase its investment in control costs by 40% for each categorys items, with the expectation that failure costs would decrease by 25% for each item of the failure categories. Sales were 12,000,000 for both 20X1 and 20X2. Required: 1. Calculate the budgeted costs for 20X2, and prepare an interim quality performance report. 2. Comment on the significance of the report. How much progress has Cassara made?
Uchdorf Manufacturing just completed a study of its purchasing activity with the objective of improving its efficiency. The driver for the activity is number of purchase orders. The following data pertain to the activity for the most recent year: Activity supply: five purchasing agents capable of processing 2,400 orders per year (12,000 orders) Purchasing agent cost (salary): 45,600 per year Actual usage: 10,600 orders per year Value-added quantity: 7,000 orders per year Required: 1. Calculate the volume variance and explain its significance. 2. Calculate the unused capacity variance and explain its use. 3. What if the actual usage drops to 9,000 orders? What effect will this have on capacity management? What will be the level of spending reduction if the value-added standard is met?
Aspen Enterprises makes award pins for various events. Budget information regarding the current period is: A fraternity with which Aspen has a long relationship approached Aspen with a special order for 6,000 pins at a price of $2.75 per pin. Variable costs will be the same as the current production, and the special order will not impact the rest of the companys orders. However, Aspen is operating at capacity and will incur an additional $5,000 in fixed manufacturing overhead if the order is accepted. Based on this information, what is the differential income (loss) associated with accepting the special order?
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Haysbert Company provides management services for apartments and rental units. In general, Haysbert packages its services into two groups: basic and complete. The basic package includes advertising vacant units, showing potential renters through them, and collecting monthly rent and remitting it to the owner. The complete package adds maintenance of units and bookkeeping to the basic package. Packages are priced on a per-rental unit basis. Actual results from last year are as follows: Haysbert had budgeted the following amounts: Required: 1. Calculate the contribution margin variance. 2. Calculate the contribution margin volume variance. 3. Calculate the sales mix variance.
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