Question

Quindo Table Company manufactures tables for schools. The 2015 operating budget is based on sales of 44,000 units at $50 per table. Budgeted variable costs are $30 per unit, while fixed costs total $660,000.

Actual sales were 46,000 units at $60 each. Actual variable costs were $33 per unit and fixed costs totaled $627,000.

Required: Prepare a variance analysis report with both flexible-budget and sales-volume variances.
                                                                 Quindo Table Company
                                                                         Variance Analysis     

	Actual Results	Flexible Variances	Flexible Budget	Volume Variances	Sales-Static
Units sold	a) ?	b) ?	c) ?	d) ?	e) ?
Sales	f) ?	g) ?	h) ?	i) ?	j) ?
Variable costs	k) ?	l) ?	m) ?	n) ?	o) ?
Contribution margin	p) ?	q) ?	r) ?	s) ?	t) ?
Fixed costs	u) ?	v) ?	w) ?	x) ?	y) ?
Operating income	z) ?	aa) ?	bb) ?	cc) ?	dd) ?

Answer 1

Quindo Table Company
Variance Analysis
	Actual Results	Flexible Variances		Flexible Budget	Volume Variances		Sales-Static
Units sold	46,000			46,000			44,000
Sales	2,760,000	460,000	F	2,300,000	100,000	F	2,200,000
Variable costs	1,518,000	138,000	U	1,380,000	60,000	U	1,320,000
Contribution margin	1,242,000	322,000	F	920,000	40,000	F	880,000
Fixed costs	627,000	33,000	F	660,000	-	None	660,000
Operating income	615,000	355,000	F	260,000	40,000	F	220,000
F stands for favorable
U stands for Unfavorable