JulyJuly. 2. NetworkNetwork?\'s 2 comma 0002,000 3. NetworkNetwork?\'s 4. Networ
ID: 2513466 • Letter: J
Question
JulyJuly.
2.
NetworkNetwork?'s
2 comma 0002,000
3.
NetworkNetwork?'s
4.
NetworkNetwork?'s
NetworkNetwork?'s
Prepare a flexible budget performance report forJulyJuly.
2.
What was the effect onNetworkNetwork?'s
operating income of selling2 comma 0002,000
units more than the static budget level of? sales?3.
What isNetworkNetwork?'s
static budget variance for operating? income?4.
Explain why the flexible budget performance report provides more useful information toNetworkNetwork?'s
managers than the simple static budget variance. What insights canNetworkNetwork?'s
managers draw from this performance? report? Table For the Month Ended July 31, 2016 Budget Amount per Unit 5,500 7,000 9,000 Units Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income 22 S 121,000 S 154,000 S198,000 55,000 70,000 90,000 10 66,00084,000 55,000 108,000 55,000 55,000 11,000 29,000 s 53,000 Print Done Sales 2016.xls .xls... Sales 2017xlsExplanation / Answer
2 Selling 2000 units will increase operating income by $ 24000. 3 Static budget variance for operating income=Actual operating income-Static budget operating income=53500-29000=24500 4 A favorable sales volume variance shows that more units are sold than budgeted. A favorable sales revenue flexible budget variance shows that selling pric per unit was more than budgeted. These variances indicates that marketing department has performed a good job.
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