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Problem 16-55 Profit Variance Analysis (LO 16-4) The results for July for Brahms & Sons follow:...
Problem 16-55 Profit Variance Analysis (LO 16-4) The results for July for Brahms & Sons follow: Actual (based on actual sales of 62,000 units) Master Budget (based on budgeted sales 60,000 units) Sales revenue $ 490,000 $ 510,000 Less Variable costs Direct material 62,000 51,000 Direct labor 80,000 90,000 Variable overhead 87,000 90,000 Marketing 15,000 15,000 Administrative 14,000 15,000 Total variable costs $ 258,000 $ 261,000 Contribution margin $ 232,000 $ 249,000 Less Fixed costs Manufacturing 104,000 102,000 Marketing 23,000 15,000 Administrative 82,300 81,000 Total fixed costs $ 209,300 $ 198,000 Operating profits $ 22,700 $ 51,000 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.)
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Expert Solution
| Brahms & Sons | ||||||||
| Actual | Budget | Flexible Budget (Actual Units) | ||||||
| Units sold | 62000 | 60000 | ||||||
| Sales Revenue | $ 490,000.00 | $ 510,000.00 | $510000*(62000/60000) | $ 527,000.00 | ||||
| Less: Variable Cost | ||||||||
| Direct Material | $ 62,000.00 | $ 51,000.00 | $51000*(62000/60000) | $ 52,700.00 | ||||
| Direct Labor | $ 80,000.00 | $ 90,000.00 | $90000*(62000/60000) | $ 93,000.00 | ||||
| Variable Overhead | $ 87,000.00 | $ 90,000.00 | $90000*(62000/60000) | $ 93,000.00 | ||||
| Marketing | $ 15,000.00 | $ 15,000.00 | $15000*(62000/60000) | $ 15,500.00 | ||||
| Administerative | $ 14,000.00 | $ 15,000.00 | $15000*(62000/60000) | $ 15,500.00 | ||||
| Total Variable cost | $ 258,000.00 | $ 261,000.00 | $261000*(62000/60000) | $ 269,700.00 | ||||
| Contribution Margin | $ 232,000.00 | $ 249,000.00 | $249000*(62000/60000) | $ 257,300.00 | ||||
| Less: Fixed Cost | ||||||||
| Manufacturing | $ 104,000.00 | $ 102,000.00 | ||||||
| Marketing | $ 23,000.00 | $ 15,000.00 | ||||||
| Administeration | $ 82,300.00 | $ 81,000.00 | ||||||
| Total Fixed cost | $ 209,300.00 | $ 198,000.00 | ||||||
| Operating Profit | $ 22,700.00 | $ 51,000.00 | ||||||
| Sales Activity Variance | ||||||||
| Flexible Budget | Sales Activity Variance | Master Budget | ||||||
| Sales Revenue | $ 527,000.00 | 17000(F) | $ 510,000.00 | |||||
| Less: Variable Cost | ||||||||
| Direct Material | $ 52,700.00 | 1700(U) | $ 51,000.00 | |||||
| Direct Labor | $ 93,000.00 | 3000(U) | $ 90,000.00 | |||||
| Variable Overhead | $ 93,000.00 | 3000(U) | $ 90,000.00 | |||||
| Marketing | $ 15,500.00 | 500(U) | $ 15,000.00 | |||||
| Administerative | $ 15,500.00 | 500(U) | $ 15,000.00 | |||||
| Total Variable cost | $ 269,700.00 | 8000(U) | $ 261,000.00 | |||||
| Contribution Margin | $ 257,300.00 | 8300(F) | $ 249,000.00 | |||||
| Less: Fixed Cost | ||||||||
| Manufacturing | $ 102,000.00 | $ 102,000.00 | ||||||
| Marketing | $ 15,000.00 | $ 15,000.00 | ||||||
| Administeration | $ 81,000.00 | $ 81,000.00 | ||||||
| Total Fixed cost | $ 198,000.00 | $ 198,000.00 | ||||||
| Operating Profit | $ 59,300.00 | 8300(F) | $ 51,000.00 | |||||
| Profit Variance Analysis | ||||||||
| Actual(A) | Manufacturing Variance=(A)-(B) | Marketing & Administrative Variance | Sales Price Variance=(A)-(B) | Flexible Budget=(B) | Sales Activity Variance | Master Budget | ||
| Sales Revenue | $ 490,000.00 | 37000(U) | $ 527,000.00 | 17000(F) | $ 510,000.00 | |||
| Less: Variable Cost | ||||||||
| Direct Material | $ 62,000.00 | 9300(U) | $ 52,700.00 | 1700(U) | $ 51,000.00 | |||
| Direct Labor | $ 80,000.00 | 13000(F) | $ 93,000.00 | 3000(U) | $ 90,000.00 | |||
| Variable Overhead | $ 87,000.00 | 6000(F) | $ 93,000.00 | 3000(U) | $ 90,000.00 | |||
| Marketing | $ 15,000.00 | 500(F) | $ 15,500.00 | 500(U) | $ 15,000.00 | |||
| Administerative | $ 14,000.00 | 1500(F) | $ 15,500.00 | 500(U) | $ 15,000.00 | |||
| Total Variable cost | $ 258,000.00 | $ 269,700.00 | 8000(U) | $ 261,000.00 | ||||
| Contribution Margin | $ 232,000.00 | 9700(F) | 2000(F) | 37000(U) | $ 257,300.00 | 8300(F) | $ 249,000.00 | |
| Less: Fixed Cost | ||||||||
| Manufacturing | $ 104,000.00 | 2000(U) | $ 102,000.00 | $ 102,000.00 | ||||
| Marketing | $ 23,000.00 | 8000(U) | $ 15,000.00 | $ 15,000.00 | ||||
| Administeration | $ 82,300.00 | 1300(U) | $ 81,000.00 | $ 81,000.00 | ||||
| Total Fixed cost | $ 209,300.00 | $ 198,000.00 | $ 198,000.00 | |||||
| Operating Profit | $ 22,700.00 | 7700(F) | 7300(U) | 37000(U) | $ 59,300.00 | 8300(F) | $ 51,000.00 | |
ekkarill92 answered 1 year agoRelated Solutions
Problem 16-55 Profit Variance Analysis (LO 16-4) The results for July for Brahms & Sons follow: ...
Problem 16-55 Profit Variance Analysis (LO 16-4)
The results for July for Brahms & Sons
follow:
Actual (based on actual sales of 98,000 units)
Master Budget (based on budgeted sales 96,000 units)
Sales revenue
$
650,000
$
816,000
Less
Variable costs
Direct material
98,000
81,600
Direct labor
98,000
144,000
Variable overhead
105,000
144,000
Marketing
20,800
24,000
Administrative
15,800
24,000
Total variable costs
$
337,600
$
417,600
Contribution margin
$
312,400
$
398,400
Less
Fixed costs
Manufacturing
138,100
138,000
Marketing
43,800...
Problem 16-54 Sales Activity Variance (LO 16-3) The results for July for Brahms & Sons follow:...
Problem 16-54 Sales Activity Variance (LO 16-3) The results for
July for Brahms & Sons follow: Actual (based on actual sales of
55,000 units) Master Budget (based on budgeted sales 50,000 units)
Sales revenue $ 465,000 $ 575,000 Less Variable costs Direct
material 60,300 63,000 Direct labor 56,100 79,000 Variable overhead
64,900 79,000 Marketing 21,900 35,000 Administrative 20,300 35,000
Total variable costs $ 223,500 $ 291,000 Contribution margin $
241,500 $ 284,000 Less Fixed costs Manufacturing 103,900 103,000
Marketing 24,300...
The results for July for Brahms & Sons follow: Actual (based on actual sales of 64,000...
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...
The results for July for Brahms & Sons follow: Actual (based on actual sales of 100,000...
The results for July for Brahms & Sons
follow:
Actual (based on actual sales of 100,000 units) Master Budget
(based on budgeted sales 90,000 units)
Sales revenue $ 640,000 $ 765,000
Less
Variable costs
Direct material 100,000 76,500
Direct labor 95,000 135,000
Variable overhead 102,000 135,000
Marketing 18,400 22,500
Administrative 15,500 22,500
Total variable costs $ 330,900 $ 391,500
Contribution margin $ 309,100 $ 373,500
Less
Fixed costs
Manufacturing 138,300 132,000
Marketing 42,000 22,500
Administrative 98,800 96,000
Total fixed costs...
The results for July for Brahms & Sons follow: Actual (based on actual sales of 66,000...
The results for July for Brahms & Sons
follow:
Actual (based on actual sales of 66,000 units)
Master Budget (based on budgeted sales 64,000 units)
Sales revenue
$
510,000
$
544,000
Less
Variable costs
Direct material
66,000
54,400
Direct labor
82,000
96,000
Variable overhead
89,000
96,000
Marketing
15,800
16,000
Administrative
14,200
16,000
Total variable costs
$
267,000
$
278,400
Contribution margin
$
243,000
$
265,600
Less
Fixed costs
Manufacturing
111,000
106,000
Marketing
24,100
16,000
Administrative
84,500
83,000
Total fixed costs...
The results for July for Brahms & Sons follow: Actual (based on actual sales of 98,000...
The results for July for Brahms & Sons
follow:
Actual (based on actual sales of 98,000 units)
Master Budget (based on budgeted sales 96,000
units)
Sales revenue
$
650,000
$
816,000
Less
Variable costs
Direct material
98,000
81,600
Direct labor
98,000
144,000
Variable overhead
105,000
144,000
Marketing
20,800
24,000
Administrative
15,800
24,000
Total variable costs
$
337,600
$
417,600
Contribution margin
$
312,400
$
398,400
Less
Fixed costs
Manufacturing
138,100
138,000
Marketing
43,800
24,000
Administrative
102,100
99,000
Total fixed costs...
Problem 16-64 Comprehensive Variance Problem (LO 16 - 5, 6) The standard cost sheet for Chambers...
Problem 16-64 Comprehensive Variance Problem (LO 16 - 5, 6)
The standard cost sheet for Chambers Company, which manufactures
one product, follows:
Direct materials, 40
yards at $3.00 per yard
$
120
Direct labor, 5 hours at $30 per
hour
150
Factory overhead applied at 70%
of direct labor
105
(variable costs = $70; fixed
costs = $35)
Variable selling and
administrative
74
Fixed selling and
administrative
50
Total unit costs
$
499
Standards have been computed based...
Problem 16-46 Solve for Master Budget Given Actual Results (LO 16-2, 4) A new accounting intern...
Problem 16-46 Solve for Master Budget Given Actual Results (LO
16-2, 4)
A new accounting intern at Gibson Corporation lost the only copy
of this period's master budget. The CFO wants to evaluate
performance for this period but needs the master budget to do so.
Actual results for the period follow:
Sales volume
130,000
units
Sales revenue
$
873,600
Variable costs
Manufacturing
192,192
Marketing and
administrative
78,624
Contribution margin
$
602,784
Fixed costs
Manufacturing
251,200
Marketing and
administrative
146,000...
Exercise 16-44 Comprehensive Cost Variance Analysis (LO 16-5, 6) NSF Lube is a fast-growing chain of...
Exercise 16-44 Comprehensive Cost Variance Analysis (LO
16-5, 6)
NSF Lube is a fast-growing chain of oil-change stores. The
following data are available for last year’s services:
NSF Lube performed 474,700 oil changes last year. It had
budgeted 432,200 oil changes, averaging 15 minutes each.
Standard variable labor and support costs per oil change were as
follows:
Direct oil specialist
services: 15 minutes at $24 per hour
$
6.00
Variable support
staff and...
Exercise 16-44 Comprehensive Cost Variance Analysis (LO 16-5, 6) NSF Lube is a fast-growing chain of...
Exercise 16-44 Comprehensive Cost Variance Analysis (LO 16-5,
6)
NSF Lube is a fast-growing chain of oil-change stores. The
following data are available for last year’s services:
NSF Lube performed 467,700 oil changes last year. It had
budgeted 435,000 oil changes, averaging 8 minutes each.
Standard variable labor and support costs per oil change were as
follows:
Direct oil specialist services: 8 minutes at $30 per hour $
4.00
Variable support staff and overhead: 10.5 minutes at $20 per
hour...
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