Question

Stuart Manufacturing Company established the following standard price and cost data: Sales price Variable manufacturing cost Fixed manufacturing cost Fixed sel1ing and administrative cost $ 8.30 per unit $ 3.40 per unit $2,900 total 700 total Stuart planned to produce and sell 2,800 units. Actual production and sales amounted to 3,000 units. Required a. Determine the sales and variable cost volume variances b. Classify the variances as favorable (F) or unfavorable (U). d. Determine the amount of fixed cost that will appear in the flexible budget e. Determine the fixed cost per unit based on planned activity and the fixed cost per unit based on actual activity. Complete this question by entering your answers in the tabs below. Req A and B Req D Req E Determine the sales and variable cost volume variances and classify the variances as favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) Volume Variances a. Sales b. Variable manufacturing Req A and 8 Req D >

Answer 1

Answer
A&B) CALCULATE VOLUME VARIANCE :
		Volume Variance
Sale Volume Variance	(budgeted sales-actual sales)sale price	(2800-3000)8.30	1660 F
Variable cost volume variance	(budgeted sales-actual sales)variable cost per unit	(2800-3000)3.40	680 U

b) DETERMINE FLEXIBLE COST IN FLEXIBLE BUDGET :
Fixed Manufacturing Cost	$          2,900
Fixed Selling & administrative cost	$             700
Total fixed cost	$          3,600

E) DETERMINE FIXED COST PER UNIT
	Master budget	flexible budget
Fixed cost	$          3,600	$                 3,600
Unit	$          2,800	$                 3,000
Fixed cost per unit	$            1.29	$                   1.20