The following financial information was summarized from the accounting records o
ID: 2592684 • Letter: T
Question
The following financial information was summarized from the accounting records of Bisco Corporation for the year ended Dec. 31:
Bread Division
Cost of Goods Sold $ 90,000
Total Operating Expenses 27,400
Net Sales Revenue 170,000
The gross profit and income from operations for the Division are:
A favorable flexible budget variance in operating income might be due to a(n)
An unfavorable direct materials cost variance of $600 and an unfavorable direct materials efficiency variance of $300 would indicate a
Using differential analysis, if revenue is expected to increase and variable cost are expected to decrease, what would be the expected change to operating income?
When product discontinuance is being considered, changes in fixed cost and ______________ will impact the decision.
Central Table Inc. has prepared a static budget at the beginning of the month. At the end of the month the following information is available:
Static Budget:
Sales volume: 2,000 units: Price $50 per unit
Variable costs: $12 per unit: Fixed costs: $25,000 per month
Operating Income: $51,000
Actual Results:
Sales volume: 1,800 units: Price $58 per unit
Variable costs: $16 per unit: Fixed costs: $35,000 per month
Operating Income: $40,600
Calculate the flexible budget variance for variable costs.
$80,000 gross profit and $52,600 operating incomeExplanation / Answer
1.
Net Sales Revenue $170,000
Less: Cost of Goods So 90,000
Gross profit $80,000
Less: Total Operating Expenses 27,400
Operating Income $52,600
$80,000 gross profit and $52,600 operating income
2. increase in unit selling price
3. total materials variance of $900 U
4. Increase
5. contribution margin
6. (1,800 x $16) - (1,800 x $12) = $7,200 U
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