Question
In: Finance
Hanno had the following static budget for March, when it expected to sell 4,000 sandwiches: Sales...
Hanno had the following static budget for March, when it expected to sell 4,000 sandwiches:
| Sales revenue | $ 48,000 |
| Variable costs | $ 32,000 |
| Fixed costs | $ 5,000 |
| Net income | $11,000 |
Hanno actually sold 5,000 sandwiches during March at $12 each.
Variable costs were $38,000 and fixed costs were $4,800.
A. Prepare a flexible budget at for March that will help Hanno separate the volume variance from the flexible budget variance. Make your income statement match my format and compute net income.
B. What is the volume variance for variable costs?
C. What is the flexible budget variance for variable costs?
Solutions
Expert Solution
| Description | 4000 Units | Per unit | ||||
| Sales revenue | $48,000 | 12.00 | ||||
| Variable costs | $32,000 | 8.00 | ||||
| Fixed costs | $5,000 | 1.25 | ||||
| Net income | $11,000 | 2.75 | ||||
| Budgeted | Actual | |||||
| Description | 5000 Units | Per unit | Per unit | |||
| Sales revenue | $60,000 | 12.00 | $60,000 | 12.00 | ||
| Variable costs | $40,000 | 8.00 | $38,000 | 7.60 | ||
| Fixed costs | $5,000 | 1.00 | $4,800 | 0.96 | ||
| Net income | $15,000 | 3.00 | $17,200 | 3.44 | ||
| Material quanitity variance | = (Standard production - Actual production) * Budgered Price | |||||
| = (5000 - 5000)*8 | ||||||
| 0 | ||||||
| Flexible budget variance | = (Standard Quantity - Actual Quantity) * Budgered Price | |||||
| = (4000 - 5000)*8 | ||||||
| (8,000) | ||||||
jeff jeffy answered 2 years agoRelated Solutions
The following static budget is provided: Static Budget Per Unit Total at 15,000 units Sales $60...
The following static budget is provided:
Static Budget
Per Unit
Total at 15,000 units
Sales
$60
$900,000
Less variable costs:
Manufacturing costs
(30)
(450,000)
Selling and administrative costs
(10)
(150,000)
Contribution margin
$20
$300,000
Less fixed costs:
Manufacturing costs
(75,000)
Selling and administrative costs
(125,000)
Total fixed costs
(200,000)
Net income
$100,000
A. What will be the net income at flexible budget at 13,000 units
produced and sold?
B. What will be the flexible budget contribution margin when
13,000 units...
You are given the following static budget report: Budget Actual Variance Unit Sales  
You are given the following static budget report:
Budget Actual Variance
Unit
Sales 10,000 15,000 5,000
F
Variable Expenses:
Commissions $30,000
$33,000 $3,000 U
Advertising $1,000
$1,200 $200 U
Travel $10,000
$11,000 $1,000 U
Samples $2,500
$2,300 $200 F
Total
Variable $43,500
47,500 $4,000 U
Fixed Expenses
Rent $5,000
$5,000 0
Salaries –
Sales $2,000
$2,000 0
Salaries –
Office $1,200
$1,200 0
Depreciation $1,500
$1,500 0
Total
Fixed $9,700
$9,700 0
Total Expenses $53,200 $57,200 $4,000 U
Prepare a flexible budget analysis and explain whether you
believe that costs were controlled. How do the results
of...
The sales-volume variance plus or minus the static budget amount results in A static budget variance...
The sales-volume variance plus or minus the static budget amount
results in
A static budget variance
The variable-budget amount
An unfavourable/favourable amount
The flexible budget amount
Cash budget—Basic Grenoble Enterprises had sales of $50,100 in March and $60,100 in April. Forecast sales...
Cash budget—Basic
Grenoble Enterprises had sales of $50,100 in March and $60,100
in April. Forecast sales for May, June, and July are $69,500,
$80,000, and $99,800,
respectively. The firm has a cash balance of $4,800 on May 1 and
wishes to maintain a minimum cash balance of $4,800. Given the
following data, prepare and interpret a cash budget for the months
of May, June, and July.
(1) The firm makes 24% of sales for cash, 62% are collected in
the...
Cash budget—Basic Grenoble Enterprises had sales of $50,100 in March and $60,100 in April. Forecast sales...
Cash budget—Basic
Grenoble Enterprises had sales of $50,100 in March and $60,100
in April. Forecast sales for May, June, and July are $69,500,
$80,000, and $99,800,
respectively. The firm has a cash balance of $4,800 on May 1 and
wishes to maintain a minimum cash balance of $4,800. Given the
following data, prepare and interpret a cash budget for the months
of May, June, and July.
(1) The firm makes 24% of sales for cash, 62% are collected in
the...
Cash budget—Basic Grenoble Enterprises had sales of $49,600 in March and $60,200in April. Forecast sales for...
Cash
budget—Basic
Grenoble Enterprises had sales of
$49,600 in March and
$60,200in April. Forecast sales for May, June, and July are
$69,800,$80,200,and
$ 99 comma 500$99,500,
respectively. The firm has a cash balance of
$ 4 comma 500$4,500
on May 1 and wishes to maintain a minimum cash balance of
$ 4 comma 500$4,500.
Given the following data, prepare and interpret a cash budget
for the months of May, June, and July.
(1) The firm makes
22 %22%
of sales...
Waterways Waterways Corporation is continuing its budget preparations. Waterways had the following static budget and actual...
Waterways
Waterways Corporation is continuing its budget preparations.
Waterways had the following static budget and actual overhead for
March. (Refer to Waterways 9 if you are uncertain about variable
versus fixed costs.)
Waterways
Corporation
Waterways Corporation
Manufacturing Overhead Budget Manufacturing Overhead
Costs (Actual)
(Static) For the Month of March For the Month of
March
Budgeted Production (Units)
118,000
Production in units
118,500
Indirect materials
$ 5,900
Indirect materials
$ 5,910
Indirect labor
14,160
Indirect labor
14,195
Utilities
11,800
Utilities...
Waterways Corporation is continuing its budget preparations. Waterways had the following static budget and actual overhead...
Waterways Corporation is continuing its budget preparations.
Waterways had the following static budget and actual overhead costs
for March. WATERWAYS CORPORATION Manufacturing Overhead Budget
(Static) For the Month of March Budgeted production in units
123,000 Budgeted costs Indirect materials $6,150 Indirect labor
14,760 Utilities 12,300 Maintenance 8,610 Salaries 43,800
Depreciation 16,100 Property taxes 3,000 Insurance 1,200 Janitorial
1,600 Total budgeted costs $107,520 WATERWAYS CORPORATION
Manufacturing Overhead Costs (Actual) For the Month of March
Production in units 124,000 Costs Indirect materials...
As sales manager, Joe Batista was given the following static budget report for selling expenses in...
As sales manager, Joe Batista was given the following static
budget report for selling expenses in the Clothing Department of
Martinez Company for the month of October. Martinez Company
Clothing Department Budget Report For the Month Ended October 31,
2017 Difference Budget Actual Favorable Unfavorable Neither
Favorable nor Unfavorable Sales in units 7,900 9,000 1,100
Favorable Variable expenses Sales commissions $1,896 $2,430 $534
Unfavorable Advertising expense 1,106 630 476 Favorable Travel
expense 3,318 3,150 168 Favorable Free samples given out...
As sales manager, Joe Batista was given the following static budget report for selling expenses in...
As sales manager, Joe Batista was given the following static
budget report for selling expenses in the Clothing Department of
Soria Company for the month of October. SORIA COMPANY Clothing
Department Budget Report For the Month Ended October 31, 2020
Difference Budget Actual Favorable Unfavorable Neither Favorable
nor Unfavorable Sales in units 7,800 10,000 2,200 Favorable
Variable expenses Sales commissions $2,184 $2,400 $216 Unfavorable
Advertising expense 1,092 1,000 92 Favorable Travel expense 3,432
4,500 1,068 Unfavorable Free samples given out...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 1.Use the Virtual Library to conduct research on effective speaking skills. Create an outline including the...
- Exam question 8: Instrumentation amplifier - Input coupling 8.a): What is the purpose of implementation of...
- In a minimum of 100 words Anxiety is fast becoming a top priority in clinical psychology....
- 1. A 3.0cm tall object is located 5.0cm from a converging lens that has a focal...
- A circular steel wire 3.00 m long must stretch no more than 0.25 cm when a...
- Suppose we are thinking about replacing an old computer with a new one. The old one...
- Write a code to generate a 5 kHz signal using timer. Vary it's duty cycle. Don't...
ADVERTISEMENT