Ryan Company manufacturers TVs. Some of the company\'s data was misplaced. Use t
ID: 2471167 • Letter: R
Question
Ryan Company manufacturers TVs. Some of the company's data was misplaced. Use the following information to replace the lost data:
Analysis
Actual
Results
Flexible Variances
Flexible Budget
Sales-
Volume Variances
Static Budget
Units Sold
112,500
112,500
103,125
Revenues
$42,080
$1,500 F
(A)
$1,700 U
(B)
Variable Costs
(C)
$250 U
$15,860
$2,340 F
$18,200
Fixed Costs
$8,280
$860 F
$9,140
$9,140
Operating Income
$17,690
(D)
$16,580
(E)
$14,940
Required:
a. What are the respective flexible-budget revenues (A)?
b. What are the static-budget revenues (B)?
c. What are the actual variable costs (C)?
d. What is the total flexible-budget variance (D)?
e. What is the total sales-volume variance (E)?
f. What is the total static-budget variance?
Analysis
Actual
Results
Flexible Variances
Flexible Budget
Sales-
Volume Variances
Static Budget
Units Sold
112,500
112,500
103,125
Revenues
$42,080
$1,500 F
(A)
$1,700 U
(B)
Variable Costs
(C)
$250 U
$15,860
$2,340 F
$18,200
Fixed Costs
$8,280
$860 F
$9,140
$9,140
Operating Income
$17,690
(D)
$16,580
(E)
$14,940
Explanation / Answer
a. Flexible-budget revenues (A) =$42,080 - 1,500 = $40,580
b. Static-budget revenues (B )=$40,580+ 1,700 = $42,280
c. Actual variable costs (C) =$15,860 + $250 = $16,110
d. Flexible-budget variance (D)= $17,690 - $16,580 = $1,110 favorable
e. Total sales-volume variance (E) =$2,340 favorable + $1,700 unfavorable = $640 favorable
f. Total static-budget variance =$17,690 - $14,940 = $2,750 favorable
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