The unfavorable revenue variance of $2000 was due to break down of one of the divisions machine | |||||||||||
at the beginning of the period rather than ineffectiveness of the manager. | |||||||||||
The managers performance should be evaluated by calculating the flexible budget variance which gives | |||||||||||
the information how much more the company expended to making the product and sell the actual level | |||||||||||
of output,than they have to spend if the processes has been effective and cost of the particular product | |||||||||||
have not changed. | |||||||||||
The static budget variance is affected by three factors | |||||||||||
1.price changes , | |||||||||||
2.Efficiency, | |||||||||||
3.Sales Activity | |||||||||||
But it cannot be surely be confirmed how much of these unfavorable variance is caused by the price changes, | |||||||||||
Efficiency and sales activity only on the basis of the static budget variance. | |||||||||||
A division budgeted an operating profit of $3,000 on sales of $8,000 and costs of $5,000. However, at the beginning of the period, one of the division's machines broke down and could not be f...
"I just don't understand these financial statements at all!” exclaimed Mr. Elmo Knapp. Mr. Knapp explained that he had turned over management of Racketeer, Inc., a division of American Recreation Equipment, Inc., to his son, Otto, the previous month. Racketeer, Inc., manufactures tennis rackets. "I was really proud of Otto,” he beamed. “He was showing us all the tricks he learned in business school, and if I do say so myself, I think he was doing a rather good job...
“I just don’t understand these financial statements at all!” exclaimed Mr. Elmo Knapp. Mr. Knapp explained that he had turned over management of Racketeer, Inc., a division of American Recreation Equipment, Inc., to his son, Otto, the previous month. Racketeer, Inc., manufactures tennis rackets. “I was really proud of Otto,” he beamed. “He was showing us all the tricks he learned in business school, and if I do say so myself, I think he was doing a rather good job...
"I just don't understand these financial statements at all!” exclaimed Mr. Elmo Knapp. Mr. Knapp explained that he had turned over management of Racketeer, Inc., a division of American Recreation Equipment, Inc., to his son, Otto, the previous month. Racketeer, Inc., manufactures tennis rackets. "I was really proud of Otto,” he beamed. “He was showing us all the tricks he learned in business school, and if I do say so myself, I think he was doing a rather good job...
please only answer clearly Davis Kitchen Supply produces stoves for commercial kitchens. The costs to manufacture and market the stoves at the company's normal volume of 6,000 units per month are shown in the following table. $47 Unit manufacturing costs Variable materials Variable labor Variable overhead Fixed overhead Total unit manufacturing costs Unit marketing costs Variable Fixed Total unit marketing costs Total unit costs $198 $287 Unless otherwise stated, assume that no connection exists between the situation described in each...
Davis Kitchen Supply produces stoves for commercial kitchens. The costs to manufacture and market the stoves at the company's normal volume of 6,000 units per month are shown in the following table Unit manufacturing costs Variable materials $ 51 Variable labor 76 Variable overhead 26 Fixed overhead 61 Total unit manufacturing costs $ 214 Unit marketing costs Variable 26 Fixed 71 Total unit marketing costs 97 Total unit costs $ 311 Unless otherwise stated, assume that no connection exists between...