The results for July for Brahms & Sons follow: Actual (based on actual sales of
ID: 2404131 • Letter: T
Question
The results for July for Brahms & Sons follow:
Actual (based on actual sales of 100,000 units) Master Budget (based on budgeted sales 90,000 units)
Sales revenue $ 640,000 $ 765,000
Less
Variable costs
Direct material 100,000 76,500
Direct labor 95,000 135,000
Variable overhead 102,000 135,000
Marketing 18,400 22,500
Administrative 15,500 22,500
Total variable costs $ 330,900 $ 391,500
Contribution margin $ 309,100 $ 373,500
Less
Fixed costs
Manufacturing 138,300 132,000
Marketing 42,000 22,500
Administrative 98,800 96,000
Total fixed costs $ 279,100 $ 250,500
Operating profits $ 30,000 $ 123,000
Required:
Prepare a profit variance analysis for Brahms & Sons. ( Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
Explanation / Answer
Profit variance analysis: Brahms & Sons. Actual (100,000 Units) Manu-facturingVariance Marketing &AdministrationVariance Sales PriceVariance FlexibleBudget (100,000Units) SalesActivityVariance MasterBudget (90,000Units) Sales revenue 640,000 210,000 U 850000 85000 F 765000 Variable costs: Manufacturing Direct material 100000 15000 U 85000 8500 U 76500 Direct labor 95000 55000 F 150000 15000 U 135000 Variable Overhead 102000 48000 F 150000 15000 U 135000 Marketing 18400 6600 F 25000 2500 U 22500 Administration 15500 9500 F 25000 2500 U 22500 Contribution margin 309100 88000 F 16100 F 210000 U 415000 41500 F 373500 Fixed Costs Manufacturing 138300 6300 U 132000 - 132000 Marketing 42000 19500 U 22500 - 22500 Administration 98800 2800 U 96000 - 96000 Operating profit 30000 81700 F 6200 U 210000 U 164500 41,500.00 F 123000 *765000/90000*100000=850000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.