1.
Concept Introduction:
Revenue and spending variance: The difference between the actual and budgeted revenue and expenses is stated as revenue and spending variance. It helps the organization to compare the actual results with the budget and analyze those differences. The company can achieve its desired profit with favorable price variance. It has a positive impact on profitability. An unfavorable variance suggests negative profits because, with the increased costs, the profits are reduced.
To prepare: A flexible budget performance report.
2.
Concept Introduction:
Activity Variance: A revenue or cost item in the flexible budget differs from the same item in the static planning budget by an activity variance. The difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget is the sole cause of an activity variance.
The activity variance.
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MANAGERIAL ACCT W/ACCESS
- Break-even Analysis problem. Using the following information, answer the questions below Mama's Pizzeria only sells pepperoni pizzas. The restaurant insurs the following expenses: Each pizza sells for $10/each. Fixed Costs per month General Labor Rent Utilities Variable Costs per pizza 0.50 2.50 2.00 0.50 1,500 Flour 3,000 Cheese 450 Pepperoni Sauce 1. What is the contribution margin? 2. How many pizzas must the restaurant sell in order to break even every month?arrow_forwardSam Hutchins is planning to operate a specialty bagel sandwich kiosk but is undecided about whether to locate in the downtown shopping plaza or in a suburban shopping mall. Based on the following data, which location would you recommend? LOADING... Location Downtown Suburban Annual rent, including utilities $11,500 $8,250 Expected annual demand (sandwiches) 32,500 25,500 Average variable costs per sandwich $1.40 $1.20 Average selling price per sandwich $3.15 $2.75 Expected annual profits from the Downtown location are $nothing. (Enter your response as an integer.) Expected annual profits from the Suburban location are $nothing. (Enter your response as an integer.) Therefore, the location should be recommended.arrow_forwardView Policies Current Attempt in Progress Burger Queen offers a lunch meal deal for its customers. The customer will get a burger, fry, soft drink, and ice cream for $17. If the customer were to buy each item individually, the cost would be broken down as follows: Burger Fry Soft Drink Ice Cream Using the stand-alone cost allocation, how must of the transaction price should be allocated to the fry, soft drink, and ice cream? (Do not round the intermediate calculations.) $3.40 $3.40 $8.50 $4.25 $4.00 $4.50 $0.5 zero $4.50 $3.20 $3.60 $4.25 $3.40 $4.50 zero $4.50arrow_forward
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- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College