Requirement 1. Calculate all the required variances.? (If your work is? accurate

Question

Requirement 1. Calculate all the required variances.? (If your work is? accurate, you will find that the total? static-budget variance is? $0.)

Begin with the flexible budget? columns, then the sales volume variance column. Label each variance as favorable? (F) or unfavorable? (U).

Please provide explanation on how answers were found.

Thanks.

Actual Flexible-Budget Flexible Results Variance Budget 105000 Units sold Revenues (sales Variable costs Contribution margin Fixed costs Operating ncme 105,000 672,000 445,000 227,000 178,200 48,800 $

Explanation / Answer

Multiple the Static Budget rate Per unit with Actual Units Sold to get Flexible Budget

2

Static Budget Cost Per Unit Units Sold 93000 Revenues 316200 3.40 Variable Cost 167400 1.80 Contribution Margin 148800 1.60 Fixed Cost 100000 Operating Income 48800

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