Hayden Corporation provides you with the following information for the month of

Question

Hayden Corporation provides you with the following information for the month of June: Actual (based on actual sales of 21,000 units) Master Budget (based on budgeted sales of 20,000 units) S 577,500 S 600,000 Sales revenues Less Variable costs Direct material Direct labor Variable overhead Marketing Administration 73,500 68,250 79,250 25,500 23,500 60,000 80,000 80,000 25,000 25,000 Total variable costs $ 270,000 $ 270,000 Contribution margin Less $ 307,500 $ 330,000 Fixed costs Manufacturing Marketing Administration 128,000 28,500 101,500 125,000 25,000 $ 100,000 Total fixed costs $ 258,000 $ 250,000 Operating profits $ 49,500 $ 80,000

Explanation / Answer

Hayden Corporation Profit Variance Analysis Marketing Sales Flexible Sales Actual Manufacturing variance & Adm. Variance price variance budget Activity variance Master budget Sales 577500 52500 U 630000 30000 F 600000 Variable costs: Manufacturing Direct material 73500 10500 U 63000 3000 U 60000 Direct labor 68250 15750 F 84000 4000 U 80000 Overhead 79250 4750 F 84000 4000 U 80000 Marketing 25500 750 F 26250 1250 U 25000 Administration 23500 2750 F 26250 1250 U 25000 Contribution margin 307500 10000 F 3500 F 52500 U 346500 16500 F 330000 Fixed Costs: Manufacturing 128000 3000 U 125000 0 N 125000 Marketing 28500 3500 U 25000 0 N 25000 Administration 101500 1500 U 100000 0 N 100000 Operating Profit 49500 7000 F 1500 U 52500 U 96500 16500 F 80000 *Manufacturing variance = Actual - Flexible budget Actual Flexible Variable: Direct material 73500 63000 10500 Direct labor 68250 84000 -15750 Overhead 79250 84000 -4750 Fixed: Manufacturing 128000 125000 3000 *Marketing & Administration variance = Actual - Flexible budget Variable: Marketing 25500 26250 -750 Administration 23500 26250 -2750 Fixed: Marketing 28500 25000 3500 Administration 101500 100000 1500

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