Question

Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales revenue, $381,000; variable costs, $251,500; fixed costs, $100,300. Actual results for the year were as follows: sales revenue, $361,500; variable costs, $225,300; fixed costs, $95,600. The flexible-budget operating income for the year was $35,300. a. What is the total master (static) budget variance in operating profit for the period? b. What portion of the total master (static) budget variance is attributable to actual sales volume being different from planned sales volume? c. What portion of the total variance is due to a combination of selling price and costs (variable cost per unit and total fixed costs) being different from budgeted amounts? a. Total master (static) budget variance b. Sales volume vanance c. Flexible-budget variance

Answer 1

Eduards & Bell Market Achat Sales Revenue 1.) Vauraste Cost - Contribution Budgeted +381600 4251800) tizarro Sisu 225300) 4 1262 ) Operating pruht. 29,200 $40,600 » oor Total Master Budget Vaiore Budgetid patit - Achas Photos 20.300 - 40640 - $ 11,400 foveable Soles Volurna Vororde I Budgeted sales - Schuss sales 2 381000 - 30 1500 $1,550 Ortovole 2 flesuble Budget Wawanca . Protit under - tereal Hexuble Budget port - 35,300 - 40,600 $5,300 Favorable

Ace Company 2 Per Un't At 11,200 unt At 16, 200 unit $806400 $ 166,400 Sales $72 Less! t re Variable ritg Cost $ 16 fixed lite Costis - Gross Pront - Lass: Vowable Selling Exp. $14 Fixed Marketing Exe Operating Income C$1,79,200) ($22,000) $6,05,200 $2,59,200) ($22,000) $8,85,200 ($156, soo) ($30,000) $4.18, 400 ($2,2680) ($30,000) $628,400 i Budgeted Operating fricame At 11, 200 At 16, 200 units & units $4, 18,400. $ 6, 28, 400 -

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