Cherokee Manufacturing Company established the following standard price and cost

Question

Cherokee Manufacturing Company established the following standard price and cost data Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost $12.00 per unit 7.20 per unit $3,600 total $1,200 total Cherokee planned to produce and sell 2,000 units. Actual production and sales amounted to 2,200 units Assume that the actual sales price is $11.76 per unit and that the actual variable cost is $6.90 per unit. The actual fixed manufacturing cost is $3,000, and the actual selling and administrative costs are $1,230 Requirec a.&b.; Determine the flexible budget variances and classify the effect of each variance by selecting favorable (F) or unfavorable (U) (Select "None" if there is no effect (i.e., zero variance).) Flexible Budget Variances Sales Variable manufacturing Contribution margin Fixed manufacturing Fixed selling and administrative cost Net income (loss)

Explanation / Answer

Cherokee Manufacturing Company Flexible Budget Variance Flexible Budget Actual Budget Variance Units produced and sold 2200 2200 Selling Price $                     26,400.00 $                  25,872.00 $ (528.00) (U) Variable manufacturing cost $                     15,840.00 $                  15,180.00 $   660.00 (F) Contribution Margin $                     10,560.00 $                  10,692.00 $   132.00 (F) Actual Fixed manufacturing cost $                       3,600.00 $                    3,000.00 $   600.00 (F) Actual Selling & administrative cost $                       1,200.00 $                    1,230.00 $   (30.00) (U) Operating Income $                       5,760.00 $                    6,462.00 $   702.00 (F) Working Flexible Budget Actual Budget Units produced and sold 2200 2200 Selling Price $12*2200 $11.76*2200 Variable manufacturing cost 2200*$7.2 2200*$6.9 Contribution Margin $26400-$15840 $25872-$15180 Actual Fixed manufacturing cost $                       3,600.00 $                    3,000.00 Actual Selling & administrative cost $                       1,200.00 $                    1,230.00 Net Income $10560-$3600-$1200 $10692-$3000-$1230 Flexible Budget always prepared on the basis of actual output

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.