The following information is available for Brownstone Products Company for the month of July: Units Sales revenue Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative expenses Fixed selling and administrative expenses Show Transcribed Text Master budget variance Show Transcribed Text Required: 1. What was the master budget variance for July? Was this variance favorable or unfavorable? (Indicate the effect of each variance by selecting "F" for Favorable, "U" for Unfavorable, and "None" for no effect (i.e., zero variance).) Contribution margin Operating income Show Transcribed Text 2. Compute the July sales volume variance and the flexible-budget variance for the month, both in terms of contribution margin and in terms of operating income. (Indicate the effect of each variance by selecting "F" for Favorable, "U" for Unfavorable, and "None" for no effect (i.e., zero variance).) Units Sales Variable costs: Manufacturing Selling and administrative Total variable costs Contribution margin S Fixed costs: Manufacturing Selling and administrative Total fixed costs Operating income Flexible-Budget Variance 4. Prepare pro-forma budgets for activities within its relevant range of operations. Prepare a flexible budget for each of the following two output levels: a. 3,920 units. b. 4,320 units. $ $ Flexible budget Flexible budget Master Budget (a.) (b.) 4,000 60,000 $ $ 0 $ 0 $ Actual 3,700 $ 60,500 10,800 12,700 7,300 8,700 Sales Volume Variance 0 $ 0 $ $ 0 $ 0 $ 0 $ 0 $ Master Budget 16.000 8,000 24,000 36,000 4,000 $ 60,000 16,000 13,600 13,600 10,350 8,000 10,350 23,950 12,050
The following information is available for Brownstone Products Company for the month of July: Units Sales revenue Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative expenses Fixed selling and administrative expenses Show Transcribed Text Master budget variance Show Transcribed Text Required: 1. What was the master budget variance for July? Was this variance favorable or unfavorable? (Indicate the effect of each variance by selecting "F" for Favorable, "U" for Unfavorable, and "None" for no effect (i.e., zero variance).) Contribution margin Operating income Show Transcribed Text 2. Compute the July sales volume variance and the flexible-budget variance for the month, both in terms of contribution margin and in terms of operating income. (Indicate the effect of each variance by selecting "F" for Favorable, "U" for Unfavorable, and "None" for no effect (i.e., zero variance).) Units Sales Variable costs: Manufacturing Selling and administrative Total variable costs Contribution margin S Fixed costs: Manufacturing Selling and administrative Total fixed costs Operating income Flexible-Budget Variance 4. Prepare pro-forma budgets for activities within its relevant range of operations. Prepare a flexible budget for each of the following two output levels: a. 3,920 units. b. 4,320 units. $ $ Flexible budget Flexible budget Master Budget (a.) (b.) 4,000 60,000 $ $ 0 $ 0 $ Actual 3,700 $ 60,500 10,800 12,700 7,300 8,700 Sales Volume Variance 0 $ 0 $ $ 0 $ 0 $ 0 $ 0 $ Master Budget 16.000 8,000 24,000 36,000 4,000 $ 60,000 16,000 13,600 13,600 10,350 8,000 10,350 23,950 12,050
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 21E: Madison Company uses the following rule to determine whether direct labor efficiency variances ought...
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Transcribed Image Text:The following information is available for Brownstone Products Company for the month of July:
Units
Sales revenue
Variable manufacturing costs
Fixed manufacturing costs
Variable selling and administrative expenses
Fixed selling and administrative expenses
Show Transcribed Text
Master budget variance
Show Transcribed Text
Required:
1. What was the master budget variance for July? Was this variance favorable or unfavorable? (Indicate
the effect of each variance by selecting "F" for Favorable, "U" for Unfavorable, and "None" for no effect
(i.e., zero variance).)
Contribution margin
Operating income
Show Transcribed Text
2. Compute the July sales volume variance and the flexible-budget variance for the month, both in terms
of contribution margin and in terms of operating income. (Indicate the effect of each variance by selecting
"F" for Favorable, "U" for Unfavorable, and "None" for no effect (i.e., zero variance).)
Units
Sales
Variable costs:
Manufacturing
Selling and administrative
Total variable costs
Contribution margin
3
Fixed costs:
Manufacturing
Selling and administrative
Total fixed costs
Operating income
Flexible-Budget
Variance
4. Prepare pro-forma budgets for activities within its relevant range of operations. Prepare a flexible
budget for each of the following two output levels:
a. 3,920 units.
b. 4,320 units.
$
$
$
Flexible budget Flexible budget Master Budget
(b.)
(a.)
$
0 $
0 $
Actual
3,700
$ 60,500
10,800
12,700
7,300
8,700
Sales Volume
Variance
0 $
0 $
$
0
$
0 $
0 $
0 $
4.000
60,000
16,000
8.000
Master
Budget
24,000
36,000
4,000
$ 60,000
16,000
13,600
8,000
10,350
13,600
10.350
23,950
12,050
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