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 Required 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).) Answer is not complete. Flexible Budget Variances 24,000 x F 1,440 U Sales Variable manufacturing Contribution margin Fixed manufacturing Fixed selling and administrative 960 3,600 1,200 $ 4,800 cost Net income (loss)

Explanation / Answer

* It is also Favourable as the Per Unit Variable Cost is less ( That is 6.9 < 7.2) The increase in total variable cost is beacuse of more units produced and sold

Particulars Projected Actual Variance Effect Sales 24000 25872 + 1872 F Variable 14400 15180 + 780 F * Contribution Margin 9600 10692 + 1092 F Fixed Maufacturing 3600 3000 -600 F Fixed Selling 1200 1230 + 30 U Net Income 4800 6462 + 1662 F

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

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