The following data are for the month of January for the Sterling Company: Sales Variable costs Total fixed costs Actual results 9,600 pairs at $87 per pair $72 per pair 109,200 Required: (a) Compute the static budget operating income. Static budget 9,000 pairs at $90 per pair $69 per pair 108,000 (b) Compute the sales-activity variances for sales revenues and total variable costs respectively. Indicate whether each variance is favorable or unfavorable. (c) Compute the flexible budget variance for operating income. Indicate whether the variance is favorable or unfavorable.

The following data are for the month of January for the Sterling Company: Sales Variable costs Total fixed costs Actual results 9,600 pairs at $87 per pair $72 per pair 109,200 Required: (a) Compute the static budget operating income. Static budget 9,000 pairs at $90 per pair $69 per pair 108,000 (b) Compute the sales-activity variances for sales revenues and total variable costs respectively. Indicate whether each variance is favorable or unfavorable. (c) Compute the flexible budget variance for operating income. Indicate whether the variance is favorable or unfavorable.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 8E: Standard cost summary; materials and labor cost variances Perkins Processors Inc. produces an...

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