Question

Problem 15-21 Determining and interpreting flexible budget variances LO 15-5 Narcisco Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price 90.00 Materials cost 18.00 Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative 9.00 12.60 14,40 $270,000 108,000 Assume that Narcisco actually produced and sold 32,000 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 Actual fixed costs Manufacturing overhead Selling, general, and administrative $ 87.00 18.40 8.80 12.70 14.00 $250,000 116,000

Answer 1

Solution a&b

Narcisco Publications
Flexible Budget Variances
Particulars	Actual results	Flexible Budget	Flexible Budget Variance
Sales revenue	$2,784,000.00	$2,880,000.00	$96,000.00	U
Variable manufacturing costs:
Materials	$588,800.00	$576,000.00	$12,800.00	U
Labor	$281,600.00	$288,000.00	$6,400.00	F
Overhead	$406,400.00	$403,200.00	$3,200.00	U
Selling, general and administrative costs	$448,000.00	$460,800.00	$12,800.00	F
Contribution margin	$1,059,200.00	$1,152,000.00	$92,800.00	U
Fixed costs:
Manufacturing overhead	$250,000.00	$270,000.00	$20,000.00	F
Selling, general and administrative costs	$116,000.00	$108,000.00	$8,000.00	U
Net Income	$693,200.00	$774,000.00	$80,800.00	U