Question

The results for July for Brahms & Sons follow:  

	Actual (based on actual sales of 64,000 units)						Master Budget (based on budgeted sales 62,000 units)
Sales revenue		$	500,000					$	527,000
Less
Variable costs
Direct material			64,000						52,700
Direct labor			81,000						93,000
Variable overhead			88,000						93,000
Marketing			15,400						15,500
Administrative			14,100						15,500
Total variable costs		$	262,500					$	269,700
Contribution margin		$	237,500					$	257,300
Less
Fixed costs
Manufacturing			110,000						104,000
Marketing			23,500						15,500
Administrative			83,400						82,000
Total fixed costs		$	216,900					$	201,500
Operating profits		$	20,600					$	55,800

Required:

Prepare a profit variance analysis for Brahms & Sons. ( Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

BRAHMS & SONS Profit Variance Analysis Actual (64,000 units) Manufacturing Variance Marketing & Administration Variance Sales Price Variance Flexible Budget (units) Sales Activity Variance Master Budget (62,000 units) Sales revenue $500,000 $527,000 Variable costs: Manufacturing Direct material 64,000 52,700 Direct labor 81,000 93,000 Overhead 88,000 93,000 Marketing 15,400 15,500 Administration 14,100 15,500 Contribution margin $237,500 $257,300 Fixed costs: Manufacturing 110,000 104,000 Marketing 23,500 15,500 Administration 83,400 82,000 Operating profit $20,600 $55,800

Answer 1