Allard Manufacturing Company established the following standard price and cost d

Question

Allard Manufacturing Company established the following standard price and cost data. Allard planned to produce and sell 2,300 units. Actual production and sales amounted to 2,600 units. Required Determine the sales and variable cost volume variances and indicate the effect of each variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) Determine the amount of fixed cost that will appear in the flexible budget. Determine the fixed cost per unit based on planned activity and the fixed cost per unit based on actual activity. (Round your answers to 2 decimal places.)

Explanation / Answer

(a) & (b)

Sales volume variance = (Budgeted quantity - Actual quantity)*Budgetes Sales price

Sale volume variance = (2300 - 2600)*8.60

= 2580 F

Variable cost volume variance = (Budgeted qty - Actual qty)*Budgeted Variable cost/unit

= (2300 - 2600)*3.80

= 1140 U

(d) Fixed cost will remain same.

Therefore,Flexible budget will be as follows

(e) Statement showing fixed cost per unit

particulars Amount Fixed manufacturing cost $2000 Fixed seeling and aministrative cost $500

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