Chap 15 Prob 21 4 Help Save & Exit Submit Saved Check my work Campbell Publicati

Question

Chap 15 Prob 21 4 Help Save & Exit Submit Saved Check my work Campbell Publications established the following standard price and costs for a hardcover picture book that the company produces. 10 points Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs $ 36.30 9.00 3.90 5.5e 6.60 eBoak References Planned fixed costs Manufacturing overhead Selling, general, and administrative $133,00e 51,e00 Assume that Campbell actually produced and sold 26,000 books. The actual sales price and costs incurred follow: Actual price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs $35.3e 9.20 3.8e 5.55 5,40 Actual fixed costs Manufacturing overhead Selling, general, and administrative $118,90e 57,000 Required Graw Hill

Explanation / Answer

If costs are increase it is Unfavourable and decrease is favourable.

Variance = Difference between Budgeted and Actual Prices.

FLEXIBLE BUDGET Budgeted Actual Variances Effect (A) Sales Revenue 943800 917800 26000 U (B) Variable manufacturing costs: Materials 234000 239200 5200 U Labor 101400 98800 2600 F Overhead 143000 144300 1300 U Selling general and administration costs 171600 166400 5200 F (C) Contribution Margin (A - B) 293800 269100 24700 U (D) Fixed costs: Manufacturing overhead 133000 118000 15000 F Selling general and administration costs 51000 57000 6000 U (E) Net Income (C - D) 109800 94100 15700 U * Calculation of sales: Budgeted : 26000 units * 36.30 Actual:         26000 units * 35.30 *Calculation of Variable Manufacturing Overhead: Budgeted Actual Material : (26000 * 9) (26000 * 9.20) Labor: (26000 * 3.90) (26000 * 3.80) Overhead: (26000 * 5.50) (26000 * 5.55) Selling, general and Administration costs: (26000 * 6.60) (26000 * 6.40) F   =   Favourable U = Unfavourable If sales are increase it is favourable and decrease is Unfavourable.

If costs are increase it is Unfavourable and decrease is favourable.

Variance = Difference between Budgeted and Actual Prices.

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