The following data are form the month of January for Passive Company, a maker of

Question

The following data are form the month of January for Passive Company, a maker of hats: Variable Cost Fixed Costs Sales Price Static Budget data: 9,000 pairs at 100 per pair $ 80 per pair 60,000 Actual results: 8,500 pairs at $ 90 per pair $ 75 per pair 54,000 Required: a. Complete the following table: Variable Cost Fixed Costs Sales Price Actual results: Flexible budget Static Budget data: pairs at pairs at pairs at per par per par per par per pair per pair per pair b. Prepare a schedule to show the flexible budget and sales volume variances.

Explanation / Answer

Requirement a Sales Price Variable cost Fixed Costs Actual results 8500 Pairs at 90 Per pair 75 Per pair 54000 Flexible budget 8500 Pairs at 100 Per pair 80 Per pair 60000 Static Budget data 9000 Pairs at 100 Per pair 80 Per pair 60000 Requirement b Flexible Budget 9000 Pairs 8500 Pairs Sales @ 100    9,00,000    8,50,000 Variable cost @80    7,20,000    6,80,000 Fixed Cost        60,000        60,000 Profit    1,20,000    1,10,000 Sales Volume variance =(Actual units sold - Budgeted units sold) x Budgeted price per unit = (8500-9000)X100 = 50,000 Unfavourable

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